February 21, 2017 / 2:12 AM / 3 years ago

Nikkei edges up as yen eases, Nippon Paper surges

TOKYO, Feb 21 (Reuters) - Japanese stocks edged up on Tuesday morning as the yen eased back against the dollar, although trading volumes were low as a holiday in the United States left investors short of the usual leads.

The Nikkei added 0.5 percent to 19,346.00, on track for a second straight session of gains.

The index has been held in a relatively tight range roughly between 19,500 and 18,800 over the past month, with trading influenced by the yen’s moves and shifting sentiment around U.S. policies under President Donald Trump.

“There is not a whole lot of factors for the market to trade on while it awaits Trump’s address to the Congress on Feb. 28. The market is still pinning some hope on Trump’s policies, and this is helping shore up equities as well as the dollar for now,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

The Nikkei soared to a near 12-1/2-month high of 19,615.40 early in January at the peak of the “Trump trade,” when the yen slumped against the dollar on bets of large fiscal stimulus and reflation measures under Trump.

A notable gainer among individual shares was Nippon Paper Industries, which was up 6.5 percent after the Nikkei business daily reported that the company will hike prices of printing paper for the first time since February 2015.

Shikoku Electric Power rallied more than 7 percent after it revised up its operating profit forecast for the year through March 2017 to 17.5 billion yen ($154.17 million) from 10.5 billion yen.

Taisei Lamick Co shed 4.7 percent on dilution concerns after the packaging film manufacturer announced it would issue 650,000 shares via a public offering and 97,500 shares through a private placement in a bid to raise up to 2.12 billion yen.

Sumitomo Mitsui Financial Group (SMFG) and Resona Holdings Inc rose 0.5 percent and 1.1 percent, respectively, after sources said the two banking groups are in talks to merge some of their units.

The broader Topix rose 0.4 percent to 1,552.80 and the JPX-Nikkei Index 400 also climbed 0.4 percent, to 13,932.45. ($1 = 113.5100 yen) (Editing Shri Navaratnam)

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