June 5, 2018 / 3:00 AM / a year ago

Nikkei's rebound runs into resistance at 25-day average

TOKYO, June 5 (Reuters) - A recovery in Japanese shares ran out of steam on Tuesday as the Nikkei average faced stiff resistance at its 25-day average, but sentiment was underpinned by stellar U.S. job data last week.

The Nikkei share average rose 0.1 percent to 22,498 points by late morning, after failing to sustain gains above the 25-day average, which was at 22,560. The benchmark has been rising since it hit a six-week low of 21,932 a week ago.

“It is clear that the economic fundamentals are pretty strong. Although we have trade issues, on the whole we can expect earning growth of more than 10 percent this financial year,” said Tsuyoshi Shimizu, a head of research at Asset Management One.

Strong U.S. jobs data published on Friday underscored investors’ bullish view on the global economy despite growing concerns about trade frictions between the United States and the rest of the world.

Tech shares outperformed after the U.S. Nasdaq index hit a record high for the first time in three months on Monday.

Softbank jumped 1.9 percent while Nintendo rose 1.3 percent. Industrial robot maker Fanuc gained 1.0 percent.

Sharp gained 3.0 percent after the company said its board would meet on Tuesday to consider buying Toshiba Corp’s personal computer business.

Yet optimism did not spill over much to other sectors, with decliners outnumbering gainers by about 12-7.

Financial shares were underperformer with bank shares falling 0.8 percent and security brokerages down 1.3 percent.

That helped to push down the broader Topix 0.1 percent to 1,773.32.

Japan Communications Inc rose 11 percent in heavy trade as retail investors rushed to buy after Japan’s financial watchdog said it would support a fintech experiment project by a consortium including the company.

The stock was the second most active on the main board in Tuesday morning trade.

Its price has more than doubled following the announcement by the Financial Services Agency last Thursday, though analysts said the moves appeared to highly speculative.

Kobe Steel fell 1.2 percent after prosecutors and police searched the headquarters of the company over its data fabrication scandal. (Editing by Kim Coghill)

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