World Markets

Nikkei edges up to 1-month high as chip stocks rally

* Foreigners net buyers of Japan cash stocks in April forpast 18years - analyst

* Tokyo Electron, Sumco soar on SOX index's rise

* Japan Display jumps

TOKYO, April 4 (Reuters) - Japan's Nikkei edged up to aone-month high on Thursday as chip-related stocks gained groundin line with their U.S. counterparts rose overnight, whileoptimism over U.S-China trade talks continued to supportsentiment.

The Nikkei share average .N225 rose 0.3 percent to21,787.60 in midmorning trade, the highest level since March 5.

Chip equipment makers and silicon products makers, whichrely heavily on Chinese demand, staged a rally. Tokyo Electron8035.T gained 2.7 percent, Advantest Corp6857.T soared 3.4percent and Sumco Corp3436.T jumped 5.1 percent.

On Wednesday, the Philadelphia Semiconductor index .SOX surged 2.3 percent.

"Investors took heart from strong American shares, but thisis also part of a spring rally as the new fiscal year began andnew funding is allocated," said Katsuhiko Nakamura, a directorand senior technical analyst at Mizuho Securities.

Nakamura said that foreign investors have been net buyers ofJapanese cash stocks in the month of April for the past 18years, citing data from the Tokyo Stock Exchange.

"Foreigners have been net sellers of Japanese stocks so farthis year, but investors are focused on whether there is aturnaround this month," he said.

Optimism about trade talks has supported investor riskappetite this week. On Wednesday, White House economic adviserLarry Kudlow said trade talks between the United States andChina made "good headway" last week in Beijing.

Other cyclical stocks were also in demand, with TDK Corp6762.T rising 3.1 percent and Komatsu Ltd6301.T adding 2percent.

Elsewhere, Japan Display Inc6740.T jumped 7 percent,extending its gains from the day before after sources toldReuters that the company will begin to supply organiclight-emitting diode (OLED) screens for the Apple Watch laterthis year.

The company is also seeking investment from a group thatincludes China Silkroad Investment Capital (CSIS), sources havetold Reuters. The company has said it is aiming for as much as$990 million in fresh financing.

The broader Topix .TOPX rose 0.2 percent to 1,625.08. (Editing by Sam Holmes) ((ayai.tomisawa@thomsonreuters.com; 81-3-6441-1875; ReutersMessaging: ayai.tomisawa.thomsonreuters.com@reuters.net))


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