Nikkei rebounds sharply as North Korea fears ease

TOKYO: Japanese stocks rebounded sharply on Tuesday morning and moved away from a three-month low hit on the previous day after Wall Street rallied as tensions between the United States and North Korea eased.
The Nikkei share average jumped 1.4 percent to 19,817.30 in midmorning trade, after falling 1.0 percent on the previous day to hit the lowest closing level since May 2.
U.S. officials on Sunday played down the risk of an imminent war with North Korea. Those concerns had helped wipe out nearly $1 trillion from global equity markets last week.
"Worries about a conflict between the United States and North Korea are not completely gone, but the market seems to be settled now," said Masashi Oda, general manager at the strategic investment department at Sumitomo Mitsui Trust Asset Management.
He said the Nikkei will likely rise above 20,000 on the back of positive catalysts including brisk first-quarter earnings and full-year projections from Japanese companies as well as strong growth domestic product data.
According to Rakuten Securities, Japanese companies now expect a 10.5 percent rise in their net profits for this fiscal year through March, compared to a 5.9 percent increase forecast in May.
Financial stocks, which underperformed on Monday, gained ground. Dai-ichi Life Holdings rose 2.1 percent, while T&D Holdings and Mitsubishi UFJ Financial Group rose 2.3 percent each.
Tracking strength in U.S. technology shares, Japanese chip-related companies such as Advantest Corp and Tokyo Electron gained 2.1 percent each.