* Nitori tumbles on weak results
By Ayai Tomisawa
TOKYO, June 29 (Reuters) - Japan’s Nikkei share average rose on Thursday morning to hover near two-year highs after Wall Street rebounded, with tech shares, like Advantest Corp and Shin-Etsu Chemical, outperforming the overall market.
The Nikkei gained 0.5 percent to 20,238.75 in midmorning trade, moving closer to 20,318.11 hit last week, the highest level since August 2015.
Meanwhile, the broader Topix gained 0.8 percent to its near two-year high of 1,627.54.
Tech shares, which stumbled on the previous day, rebounded after the Nasdaq posted its best session since Nov. 7 overnight. Gains in the Philadelphia Semiconductor Index also bolstered sentiment in the Japanese tech sector.
Advantest rose 1.0 percent, Hitachi Ltd added 1.3 percent and Shin-Etsu Chemical Co, a top maker of semiconductor silicon wafers, leapt 1.4 percent.
“We see reversals in some sectors today. For the overall market, investors are still waiting for major catalysts from next week as well as this weekend’s Tokyo poll,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities, referring to Sunday’s Tokyo Metropolitan assembly election.
Japanese Prime Minister Shinzo Abe’s government, its ratings slipping over suspicions of favouritism, has suffered a fresh embarrassment after his defense minister made politically sensitive remarks just days ahead of a key local election.
“It’s not like the market is deeply worried about the election. But from foreign investors’ standpoint, political stability was one of the reasons to invest in the Japanese market, so we don’t want a negative surprise on the weekend,” Mizuho’s Kuramochi said.
Next week, the market is focused on the Bank of Japan’s ‘tankan’ business sentiment survey as well as U.S. economic indicators which include ISM Manufacturing PMI and unemployment data.
Bucking the strength, Nitori Holdings tumbled 6.7 percent after the furniture retailer saw its operating profit decline by 5.6 percent to 25.72 billion yen ($229 million) in March-May, hurt by a weaker yen and expenses related to new store openings. (Editing by Simon Cameron-Moore)