Tokyo stocks were slightly higher Monday morning as investor sentiment was supported by receding fears of earlier-than-expected U.S. interest rate hikes following remarks from U.S. Federal Reserve Chairman Jerome Powell late last week.

The 225-issue Nikkei Stock Average rose 77.72 points, or 0.28 percent, from Friday to 27,718.86. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 13.09 points, or 0.68 percent, at 1,941.86.

Gainers were led by iron and steel, marine transportation, and nonferrous metal issues.

The U.S. dollar dipped slightly within the upper 109 yen range as investors sold the unit after Powell's comments caused U.S. Treasury yields to decline, fueling speculation that the interest rate gap between the United States and Japan will narrow, dealers said.

At noon, the dollar fetched 109.79-83 yen compared with 109.80-90 yen in New York and 110.10-11 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1805-1806 and 129.61-62 yen against $1.1793-1803 and 129.50-60 yen in New York and $1.1760-1762 and 129.48-52 yen in Tokyo late Friday afternoon.

Stocks rose on the back of advances on Wall Street late last week, but pared gains in the morning as market participants moved to lock in profits after the Nikkei index briefly surpassed the 27,900 mark.

"The (Fed's) Jackson Hole symposium and record highs on Wall Street acted as a tailwind to the market, while investors have priced in the tapering of monetary stimulus for this year," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co.

Powell virtually told the symposium Friday the central bank was on the road to begin stimulus tapering, but added the move "will not be intended to carry a direct signal regarding the timing of interest rate liftoff."

However, the market continued to be weighed down by the high number of domestic COVID-19 cases, deepening concerns over Japan's economic recovery, while the coronavirus state of emergency is expected to be extended past its current end date of Sept. 12, Fujito said.

On the First Section, advancing issues outnumbered decliners 1,707 to 380, while 95 ended the morning unchanged.

Some chip-related shares rose after the technology-heavy Nasdaq index hit a record high on Friday. Sumco climbed 42 yen, or 1.8 percent, to 2,327 yen, Tokyo Electron gained 340 yen, or 0.7 percent, to 46,420 yen, and Screen Holdings advanced 130 yen, or 1.4 percent, to 9,340 yen.

Among some companies sensitive to domestic demand that were hit by concerns over the infection rate in Japan, Mitsubishi UFJ Financial Group dropped 1.5 yen, or 0.3 percent, to 590.3 yen, and Fukuoka Financial Group sank 9 yen, or 0.4 percent, to 2,044 yen.

==Kyodo

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