Nikkei rises on Evergrande debt payment; election, corporate outlook weigh

TOKYO, Oct 22 (Reuters) – Japan’s Nikkei rose on Friday, recouping early losses, after embattled developer China Evergrande Group made a bond payment, while caution ahead of the nation’s general election and corporate earnings season capped gains.

The Nikkei share average rose 0.69% to 28,905.86 by 0203 GMT, snapping a 0.56% drop earlier in the session. But the index is set to lose 0.55% for the week. The broader Topix rose 0.38% to 2,008.34.

The Nikkei added its gains after news that China Evergrande Group wired funds to a trustee account on Thursday for a bond interest payment due Sept. 23.

“The news on Evergrande has helped reduce uncertainties about the debt repayment issues of Evergrande. This is not going to solve the entire issues but at least this was a relief,” said Takatoshi Itoshima, strategist at Pictet Asset Management.

Technology shares led the gains, with chip-making equipment makers Tokyo Electron and Screen Holdings jumping 4.53% and 5.09%, respectively, while camera maker Nikon rose 3.85%.

Chip-making equipment maker Disco rose 3.49% after it posted a 71% jump in its first-half operating profit.

Otherwise, investors struggled to find reasons for active trading.

“Investors have little reasons to buy or sell before major companies start reporting their earnings next week,” said Jun Morita, general manager of the research department at Chibagin Asset Management.

“Also, it is sceptical that the LDP (Liberal Democratic Party) will enjoy a landslide victory at the coming election.”

The LDP could lose some seats in the Oct. 31 lower house election, but the ruling coalition it forms with the Komeito party is expected to maintain a majority, local media had reported.

Mizuho Financial Group, down 1.16%, lost the most among top 30 core Topix names, followed by mobile phone operator KDDI Corp, which fell 0.78%. (Reporting by Junko Fujita; Editing by Anil D’Silva)