* Defence equipment makers rise after Trump cancels Pompeo’s visit to North Korea
* Tech, auto stocks attract buying
By Ayai Tomisawa
TOKYO, Aug 27 (Reuters) - Japan’s Nikkei rose to near five-week highs on Monday morning, tracking a positive note in Wall Street after the U.S. Federal Reserve Chairman Jerome Powell affirmed the Fed’s current rate hike policy.
The Nikkei share average rose 0.9 percent to 22,797.27 in midmorning trade, after touching 22,813.27, the highest level since July 20.
Japanese stocks followed gains in U.S. shares, with all but the mining and airline sectors in positive territory. Exporters such as automakers and tech companies led the gains.
“A strong U.S. economy is good news to Japanese companies as they rely on U.S. demand,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
Speaking at a research symposium in Jackson Hole, Wyoming, Powell said the Fed’s gradual interest rate hikes were the best way to protect the economic recovery, maintain strong job growth and keep inflation under control.
His comments pushed the S&P 500 and the Nasdaq to record highs on Friday.
Toyota Motor Corp surged 1.8 percent, Honda Motor Co added 1.4 percent, Tokyo Electron advanced 1.8 percent and TDK Corp rose 1.9 percent.
Also attracting buyers were defence equipment makers as investors speculated that geopolitical tension would rise after U.S. President Donald Trump abruptly cancelled his top diplomat’s planned trip to North Korea on Friday.
Ishikawa Seisakusho gained 2.2 percent, IHI surged 3.3 percent, Howa Machinery advanced 1.5 percent and Hosoya Pyro-Engineering Co jumped 6.8 percent.
These stocks tend to rise in short-term trade when investors take the view that international political tensions may escalate.
Trump partly blamed China for the lack of progress with North Korea and suggested that talks with Pyongyang, led so far by Secretary of State Mike Pompeo, could be on hold until after Washington resolved its bitter trade dispute with Beijing.
The broader Topix gained 0.8 percent to 1,723.19. (Reporting by Ayai Tomisawa Editing by Eric Meijer)