September 25, 2018 / 2:54 AM / 3 months ago

Nikkei edges higher as chip-related stocks rise, but trade talks cap gains

* Machinery stocks fall on profit-taking triggered by Sino-U.S. trade woes

* Mazda falls on worries about loss related to rains in July

By Ayai Tomisawa

TOKYO, Sept 25 (Reuters) - Japan’s Nikkei edged higher on Tuesday morning helped by gains in chip equipment makers, but gains were limited as U.S.-Japan trade talks scheduled this week kept investors cautious.

Investors returned to the market after a national holiday on Monday. The dollar’s move above 112 yen level has underpinned confidence among Japan’s export-exposed firms.

Tuesday’s gainers included large cap stocks such as Tokyo Electron and Advantest Corp, which soared 3.0 percent and 3.4 percent, respectively, tracking steady U.S. tech shares overnight.

The Nikkei share average gained 0.1 percent to 23,901.40 after dipping in negative territory. The benchmark index has hit a more than eight-month high after rising U.S. yields pushed up financial stocks while the weak yen supported overall sentiment.

The next milestone is the 24,129.34 level hit on Jan. 23, a break of which would put the index at its highest since November 1991.

Japan and the United States postponed their second round of trade talks in New York to Tuesday from Monday, a Japanese official said, amid concerns in Tokyo that it would face greater pressure to reduce the bilateral trade imbalance.

U.S. Trade Representative Robert Lighthizer and Economy Minister Toshimitsu Motegi were scheduled to meet on Monday evening, ahead of a Wednesday summit between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, on the sidelines of a U.N. General Assembly meeting.

“The market wants to see the outcome of the trade talks and the summit this week before chasing the market further,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities, adding that the market is jittery as a new round of U.S.-China tariffs triggered profit-taking in machinery companies which rely on China demand.

Keeping broader sentiment cautious, China and the United States imposed a new round of tariffs on each other’s goods on Monday, which is expected to hit global growth.

Construction equipment makers Komatsu Ltd shed 2.0 percent and Hitachi Construction Machinery declined 2.7 percent, as investors took profits from 13 percent gains in their shares over the past week. Electrical equipment maker Yaskawa Electric tumbled 5.9 percent after jumping 13 percent last week.

Mazda Motor dropped more than 2 percent after the automaker said on Friday that it has suffered 28 billion yen impact from a loss of production due to western Japan rains in July.

The broader Topix gained 0.6 percent to 1,814.72. (Editing by Sam Holmes)

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