August 2, 2018 / 1:43 AM / 4 months ago

Nikkei edges down on weak earnings, but rising yields boost banks

* Nikkei drops 0.24 pct, pulls back from near 2-week highs

* Kobe Steel slumps on earnings, Furukawa Elec falls

* But banks strong as Japan’s long-term bond yields keep rising

By Shinichi Saoshiro

TOKYO, Aug 2 (Reuters) - Japan’s Nikkei share average dipped on Thursday after weak earning reports by companies such as Kobe Steel and in the wake of declines on Wall Street, but losses were limited as banks performed strongly on the back of rising bond yields.

The Nikkei was down 0.24 percent at 22,691.24, inching away from a near two-week high marked the previous day.

The S&P 500 and the Dow slipped on Wednesday as gains in Apple shares were offset by a drop in energy and industrial companies, with the latest flare-up in U.S.-China trade tensions dampening broader sentiment.

Kobe Steel fell more than 8 percent after it reported a 55 percent drop in recurring profit in the April-June quarter as a data-tampering scandal that hit Japan’s third largest steelmaker hurt profits.

And Furukawa Electric Co slumped 11 percent after the maker of metal products, cables and optical fibres saw its net profit fall 51.6 percent to 3.31 billion yen in the April-June quarter.

But a rise in Japan’s benchmark 10-year bond yield to a 1-1/2-year peak lifted financial shares, with higher interest rates seen as a boon for banks.

Sumitomo Mitsui Financial Group rose 0.44 percent, Mitsubishi UFJ Financial Group was up 0.8 percent and Mizuho Financial Group gained 1.1 percent.

The banking subsector has climbed roughly 2.6 percent so far this week.

Other gainers included Konica Minolta Inc, which rose 4.92 percent after the printer and optical devices manufacturer revised up its operating profit forecast for the year through March 2019 to 62 billion yen ($555 million) from 60 billion yen.

Technology stocks advanced after the tech-heavy Nasdaq rose overnight.

Tokyo Electron climbed 0.5 percent, Advantest Corp gained 1.4 percent and SUMCO Corp rose 0.37 percent.

The broader Topix was 0.02 percent lower at 1,769.27.

$1 = 111.6900 yen Reporting by Shinichi Saoshiro Editing by Joseph Radford

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