Nikkei edges higher, stops short of erasing pandemic loss

* Nikkei up slightly, investors hesitate to advance rally

* Nikkei yet to close Feb chart gap opened after COVID-19 outbreak

* Hopes of economic recovery and vaccines underpin sentiment

* Real estate shares hit by rising bond yields

By Hideyuki Sano

TOKYO, Aug 14 (Reuters) – Japan’s Nikkei share average eked out gains on Friday, but stopped short of a final step towards a complete recovery from its decline triggered by the coronavirus crisis.

The Nikkei ended 0.17% higher at 23,289.36, briefly hitting a six-month high for two straight sessions, but did not rise enough to close a major chart gap between 23,378 and 22,950 made in February, when signs of global spread of the COVID-19 caught investors off guard.

Given risk factors such as uncertainties over U.S. stimulus and intensifying China-U.S. tensions, investors regarded profit-taking more prudent than chasing the rally further.

The broader Topix dipped 0.05% to 1,623.28, having risen 8.5% just in the first two weeks of August, supported by hopes of gradual recovery in the global economy and rapid development of COVID-19 vaccines.

“The market has been strong even for a bull like me. It has been driven by short-covering by foreign investors,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute.

The biggest gainer among the top 100 firms was Fujifilm Holdings, which rose 2.8% after the company said it expects data from a clinical trial of its Avigan drug on COVID-19 patients to be ready in about a month.

Dentsu gained 2.2% after the advertising firm managed to eke out small gains, despite analyst forecasts of a quarterly net loss.

Oisix Ra Daichi, one of the stay-at-home stock winners, advanced 11.8% to an all-time high after local media reported, which was later confirmed, that the food delivery service operator will tie up with restaurant chain Ootoya Holdings.

On the other hand, rise in bond yields this week also prompted investors to take profit from interest rate-sensitive shares, including Softbank, and real estate firms .

Softbank fell 1.5%, while realtor Mitsui Fudosan and Mitsubishi Estate dropped 3.1% and 2.3%, respectively. (Editing by Sherry Jacob-Phillips and Rashmi Aich)

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