June 11, 2018 / 6:56 AM / a year ago

Japan stocks gain in thin trade as markets await U.S.-N.Korea summit

TOKYO, June 11 (Reuters) - Japanese stocks rose on Monday but trading was thin as investors looked ahead to the looming the U.S.-North Korea summit, with traders ascribing part of the broader gains to buying in futures.

The Nikkei share average rose 0.5 percent to 22,804.04.

The broader Topix advanced 0.3 percent to 1,786.84, but volume was low, with only 1.1 billion shares changing hands, the lowest level in two weeks.

U.S. and North Korean officials were in talks in Singapore on Monday in a late bid to narrow differences before their leaders hold an historic summit aimed at finding ways to end a nuclear stand-off on the Korean peninsula.

North Korea’s Kim Jong Un and U.S. President Donald Trump arrived in the tropical city-state on Sunday for the first ever face-to-face meeting by leaders of two countries that have been enemies since the 1950-1953 Korean War.

“Event-driven funds were seen buying futures as they expect that the outcome of the summit would be positive,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “They are seen buying futures and selling the yen.”

The dollar rose 0.5 percent to 110.04 yen at 0636 GMT, lifting some exporters such as Honda Motor Co and Panasonic Corp, which advanced 1.7 percent and 1.1 percent, respectively.

For this week, analysts also said that overall trade may stay subdued as investors await other important economic events.

The U.S. Federal Reserve is widely expected to announce an interest rate hike on Wednesday while the European Central Bank will debate whether to end bond purchases later this year.

Analysts also said that global trade war worries will likely persist after Trump threw the G7’s efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau.

Such defensive shares as food and drugmaker stocks staged a rally, with Ajinomoto Co up 2.2 percent and Kikkoman Corp rising 2.3 percent and Otsuka Holdings adding 1.2 percent. (Reporting by Ayai Tomisawa Editing by Darren Schuettler & Shri Navaratnam)

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