Nikkei edges up, BOJ's ETF buying helps sentiment

* BOJ’s ETF buying supports mood – analysts * Drugmakers outperform on strong U.S. healthcare shares * Rakuten falls after Goldman cuts rating By Ayai Tomisawa TOKYO, March 5 (Reuters) – Japan’s Nikkei share average edged up on Thursday after the central bank bought more exchange-traded funds, but gains were limited by investor caution ahead of U.S. jobs data on Friday.

The Nikkei opened lower, but rose 0.2 percent to 18,742.97 by mid-morning, not far from its 15-year high of 18,939.17.

Analysts said investors were looking to U.S. job and wage data on Friday for further clues on when the Federal Reserve may raise interest rates.

But they also said that sentiment was supported by the central bank’s move on Tuesday and Wednesday to purchase 35.2 billion yen ($ 293.90 million) of exchange-traded funds (ETFs) each day, the first time in three weeks.

“People expect that the BOJ will support the market by buying ETFs when the market is weak in the morning,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Healthcare stocks, which outperformed in the U.S. market on the previous day, lifted some Japanese drugmakers.

Ono Pharmaceutical Co, which co-develops cancer treatment drug Opdivo with Bristol Myers Squibb, jumped 8 percent after U.S. health regulators approved the drug for lung cancer.

The pharmaceutical sector gained 2.3 percent and was the second biggest gainer among 33 Topix’s subsectors.

Other drugmakers also got a lift from strong performances in U.S. healthcare shares while retail investors are attracted to their high dividend yields, analysts said. The drugmakers’ dividend yield stood at 1.99 percent, compared with the Nikkei’s 1.38 percent.

Takeda Pharmaceutical Co gained 2.2 percent. Eisai Co jumped 5.4 percent after it and Merck announced a clinical trial collaboration to explore combination regimens of Anti-PD-1 therapy.

Exporters were mixed, with Toyota Motor Corp falling 0.4 percent and Honda Motor Co gained 0.3 percent.

Bucking the trend, Rakuten Inc dropped 1.3 percent after Goldman Sachs cut its rating to ‘neutral’ from ‘buy,’ saying that positive factors such as margin improvement in the financial business were already priced into its shares.

The broader Topix rose 0.3 percent to 1,521.98 and the JPX-Nikkei Index 400 added 0.4 percent to 13,830.90.

($ 1 = 119.7700 yen) (Editing by Kim Coghill)

Nikkei Futures

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