* Nikkei, dollar both pull away from recent 5-month lows
* North Korea tensions ease, though still in background
TOKYO, April 18 Japan's Nikkei stock index took
its cue from a rebound in U.S. shares and a weaker yen on
Tuesday, pulling away from its recent five-month lows.
The Nikkei was up 0.2 percent at midday at
The dollar added 0.1 percent at 108.96 yen, after
plumbing five-month lows on Monday. It rose after U.S. Treasury
Secretary Steven Mnuchin told the Financial Times he agreed with
President Donald Trump that the dollar's strength in the short
term was hurting exports, but a strong dollar over the long term
Wall Street rebounded overnight, as market focus shifted
from tensions in North Korea and Syria to earnings later this
week, with the S&P 500 pulling off last week's two-month
"Much-awaited U.S. market rebound lifts the Tokyo market,
and investors are not swayed by recent yen strength that usually
depresses Japanese stocks," said Hiroki Allen, chief
representative of Superfund Japan in Tokyo.
Risk sentiment also perked up after North Korea's latest
missile blew up almost immediately after its test launch on
"Geopolitical risks in this region, particularly in Japan
toward North Korea, had sent market sentiment to fairly extreme
lows," said Stefan Worrall, director of Japan equity sales at
Credit Suisse in Tokyo.
But even as tensions eased, they did not evaporate. U.S.
Vice President Mike Pence warned North Korea on Monday that
recent American military strikes in Syria and Afghanistan showed
Trump's resolve should not be questioned, even as Pyongyang
vowed to continue its missile and nuclear tests.
Higher rates and the brighter market helped lift Japanese
banking and financial shares.
The Tokyo Stock Exchange's banks subindex rose
1.7 and the securities subindex added 1.3 percent.
Shares of engine maker Daihatsu Diesel jumped as
much as 9.2 percent to their highest levels since mid-December,
after it raised its group net profit outlook on Monday.
The broader Topix added 0.4 percent to 1,471.47,
while the JPX-Nikkei Index 400 also gained 0.4
percent to 13,190.03.
(Reporting by Tokyo markets team; Editing by Richard Borsuk)