TOKYO, Feb 22 (Reuters) - Japanese shares jumped on Monday,
snapping a three-day losing streak, as optimism on economic
recovery from the pandemic prompted fresh buying in materials,
travel-related and other cheap cyclical stocks.
Nikkei share average rose 0.46% to 30,156.03, while
the broader Topix gained 0.49% to 1,938.35.
Investors scooped up cyclical shares with cheap valuation
including Yokohama Rubber and Sumitomo Metal,
which gained 8.9% and 7.2%, respectively.
Travel-related shares also advanced as investors bet on a
continued recovery in the global economy with COVID-19
vaccination programmes gathering pace across the world.
Airliner ANA Holdings notched up 5.8%, while rival
Japan Airlines added 5.7%. Department store operators
also bounced back, with J.Front Retailing up 2.4% and
Takashimaya trading 1.6% higher.
Chip-related shares continued to do well, with Tokyo
Electron gaining 6.3%.
Rise in U.S. bond yields also lifted Japanese financials,
which are considered to benefit from higher interest income,
with banks up 1.8% and insurers adding
"But one thing that warrants caution is a rise in real U.S.
interest rates. The market is strong today but I believe people
are nervous at the same time," said Hiroshi Watanabe, senior
economist at Sony Financial Holdings.
Such concerns make Federal Reserve Chair Jerome Powell's
Congressional testimony on Tuesday all the more important,
Watanabe added, as U.S. real bond yields have risen almost 30
basis points in just over a week.
The Bank of Japan refrained from buying exchange traded
funds (ETFs) over the past two sessions, when the Topix fell
more than 0.5% in morning trade, a criteria that would have
prompted the central bank's buying in the past.
Yet the market shrugged it off as investors have been
expecting the BOJ to curtail its buying as the market has risen
to a three-decade high.
(Reporting by Hideyuki Sano;
Editing by Vinay Dwivedi)