Nikkei rebounds from 5-month low on China rate cut, game-maker rally boost

TOKYO, Jan 20 (Reuters) - Japan's Nikkei share average rebounded from a five-month low on Thursday, led by Sony and other video-game makers, after China ramped up its monetary easing measures to shore up a slowing economy by lowering a set of key policy rates.

The Nikkei ended up 1.11% at 27,772.93, extending the morning's gains in the afternoon. About three stocks gained for every one that fell.

The benchmark survived a sharp mid-morning dip, which pushed the index to its lowest intraday level since Aug. 23. China's surprise interest rate cut initially stoked fears of an economic slowdown, but investors were cheered by the rally in shares in the rest of the region, market participants said.

With the property downturn seen persisting into 2022 and fast-spreading Omicron variant dampening consumer activity, many analysts in China expect more easing measures will be necessary, despite other major economies appearing set to tighten their monetary policies.

On Wednesday, the Nikkei closed below 27,500 for the first time since Aug. 20, with Sony and Toyota Motor registering steep declines.

"The Nikkei has dropped to a level where it looks cheap, tempting investors to come in and buy the dip," said a market participant at a domestic securities firm.

Video-game maker Konami Holdings rallied 6.20% to be the biggest percentage gainer in the Nikkei. Sony added 5.84%, recovering from a nearly 13% slide hit in the previous session. Nintendo rose 2.8%.

Toyota Motor rose 1.72% following a 5% drop in the previous session. SoftBank Group advanced 2.12%.

Retailers also gained, with department store operator Isetan Mitsukoshi Holdings jumping 5.32%, while Uniqlo store operator Fast Retailing advanced 1.73% to be Nikkei's biggest gainer by index points.

The broader Topix rose 0.98%. The Topix growth share index jumped 1.35%, outpacing a 0.63% rise in the value index.

Japanese chipmakers, however, tracked their U.S. peers lower, with Tokyo Electron sliding 0.45% and Advantest dropping 1.57%, making it the biggest drag by index points.

Shippers were the biggest losers, with Kawasaki Kisen tumbling 6.51% and Mitsui OSK Lines shedding 5.26% to be the Nikkei's two biggest percentage decliners. (Reporting by Tokyo markets team; Editing by Sherry Jacob-Phillips and Uttaresh.V)