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Japanese shares edge up on tech gains, COVID-19 measures cap rise

·2 min read

TOKYO, May 7 (Reuters) - Japanese shares ended higher on Friday as investors scooped up cheap technology stocks, while concerns around the slow economic recovery due to the extension of COVID-19 emergency measures capped gains.

The Nikkei share average ticked up 0.09% to close at 29,357.82, while the broader Topix rose 0.29% to 1,933.05. Both indexes inched down earlier in the session after rising the most in two weeks on Thursday.

"The market rose too much yesterday so investors sold shares to book profits, but as soon as the indexes fell, they quickly started looking for bargains, particularly those which reported positive earnings," said Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities.

"But the gain was limited as investors were concerned that it could take some more time until Japan's economy will be normalized due to the extension of the state of emergency."

Japan is set to extend a state of emergency in Tokyo and three other areas by about three weeks until the end of May to curb a surge in coronavirus cases.

Technology shares advanced, with heavyweight Tokyo Electron rising 2.38% as investors took a second look at the positive outlook of the chip equipment maker.

Semiconductor test equipment supplier Advantest rose 0.88%, while robot maker Fanuc gained 1.15%.

On the other hand, Nintendo lost 1.95% after the game maker forecast annual sales of its Switch console to fall 11.5%.

Nippon Steel jumped 5.71%, making it the biggest gainer on the Nikkei, as the steel manufacturer's 240 billion yen ($2.2 billion) annual net profit forecast beat analyst estimates.

Trading house Mitsubishi Corp fell 3.97% and was the biggest loser on the index, posting a 68% decline in its annual net profit.

($1 = 109.0700 yen) (Reporting by Junko Fujita; Editing by Vinay Dwivedi)

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