Tokyo: Nikkei tracks Wall Street higher; Ukraine worries cap gains

[TOKYO] Japan's Nikkei share average ended higher on Thursday (Mar 3), tracking an overnight Wall Steet rally after US Federal Reserve Chair Jerome Powell signalled a less aggressive pace of interest rate hikes than investors had feared.

The benchmark index, however, ended well off the session's highs, as simmering Russia-Ukraine uncertainty weighed on sentiment.

The Nikkei share average added 0.70 per cent to 26,577.27, after rising as much as 1.18 per cent in the morning session. Of the 225 stocks on the index, 186 rose, 38 fell and one ended flat.

The broader Topix ended up 1.18 per cent at 1,881.80, after earlier gaining 1.47 per cent.

The US S&P 500 jumped 1.86 per cent overnight after Powell testified to Congress that the central bank would begin "carefully" raising rates from this month, while keeping a close eye on inflation and developments in Ukraine.

"The path for rate hikes has become clearer, but there's still uncertainty over the Ukraine situation and the impact of the rise in resource prices, making it hard to chase the market higher," said Jun Kitazawa, an equity strategist at Miki Securities.

Energy was the best performing subsector on Nikkei, rallying 3.20 per cent as crude oil continued to surge.

Financials jumped 3.17 per cent as long-term global bond yields recovered from Wednesday's steep drop, improving profit outlook.

Automakers also outperformed the broader index, as a weaker yen lifted the value of overseas sales, with US peer Ford soaring on setting up a separate electric vehicle unit.

Mazda gained 4.44 per cent, while Mitsubishi Motors added 3.90 per cent. Toyota rose 0.42 per cent.

Nintendo gained 1.80 per cent and Sony advanced 1.42 per cent.

Shippers rallied, with Nippon Yusen up 5.68 per cent and Kawasaki Kisen 5.52 per cent higher.

Bucking the trend, advertising giant Dentsu was the biggest decliner, dropping 4.03 per cent.

Uniqlo clothing store operator Fast Retailing lost 1.15 per cent, making it the biggest drag by index points.

Startup investor SoftBank Group was next, falling 1.03 per cent. REUTERS