Nikkei jumps to 13-month high as U.S.-China trade hopes lift sentiment

TOKYO, Nov 5 (Reuters) - Japan’s benchmark Nikkei share average climbed 1.5% to 13-month highs on Tuesday after a long weekend, as fresh hopes for a U.S.-China trade deal and upbeat Wall Street stocks lifted investor sentiment.

Driven by widespread gains, the Nikkei average rose to 23,193.66 by the midday break, after hitting an intra-day high earlier of 23,215.48, its peak since Oct. 10 of last year. The broader Topix advanced 1.2% to 1,686.81, its highest level in 11 months.

On Monday, all three major stock indexes on Wall Street finished at record highs on increasing signs the United States and China are inching closer to a truce in their trade war and on optimism the U.S. economy is well poised for solid consumer-driven growth.

U.S. S&P 500 futures gained a further 0.3% in early Asian trade on Tuesday after the Financial Times reported that the United States is considering dropping some tariffs on China.

The report came after Beijing and Washington spoke of progress in trade talks on Friday and U.S. Commerce Secretary Wilbur Ross said licenses for U.S. companies to sell components to China’s Huawei Technologies will come “very shortly”.

On the data front, U.S. non-farm payrolls released on Friday slowed less than expected in October as the drag from a strike at General Motors was offset by gains elsewhere, offering some assurance that consumers would continue to support the slowing economy.

In Tokyo, China- and semiconductor-related companies led the gains on Tuesday.

Construction machinery makers Komatsu and Hitachi Construction climbed 4.8% and 4.7%, respectively, while Kobe Steel added 2.6%.

Chip-related SUMCO, Advantest and Tokyo Electron rose 4.2%, 3.5% and 2.2%, respectively.

The Nikkei’s heavyweight SoftBank Group gained 2.7% to become the second-most traded stock on the Tokyo’s main board.

The investment conglomerate said on Friday it would book a 277 billion yen ($2.5 billion) gain in the second quarter after portfolio company Alibaba Group Holding recorded a $9.7 billion gain related to its stake in Ant Financial.

Elsewhere, Z Holdings, formerly known as Yahoo Japan Corp, surged 13.9% after the e-commerce firm’s operating profit rose by 11.2% year-on-year in the July-September quarter. ($1 = 108.6600 yen) (Reporting by Tomo Uetake; Editing by Muralikumar Anantharaman)