Japanese shares rise on Wall Street optimism, strong earnings

TOKYO, Aug 15 (Reuters) - Japanese shares rose on Monday, catching the tailwind from a bounce on Wall Street, as upbeat corporate earnings lifted risk appetite and prompted investors to scoop up stocks.

The Nikkei jumped 0.99% to 28,830.90 by the midday break. The benchmark extended gains after hitting a seven-month high on Friday.

The broader Topix was up 0.51% at 1,983.22.

Wall Street closed higher on Friday, as signs that inflation may have peaked in July increased investor confidence a bull market could be underway and spurred the S&P 500 and the Nasdaq to post their fourth straight weekly gain.

"There was an optimism in U.S. equities market in the previous session. That has promoted investors to make bets on stocks that had been sold off but reported strong earnings," said Ikuo Mitsui, fund manager at Aizawa Securities.

Investors appeared to show scant response to data on Monday that signalled Japan's economy rebounded at a slower-than-expected pace in the second quarter from a COVID-induced slump. "Investors are now trying to gauge whether the market has recovered, or there would be another retreat. But today it seems they are making positive bets."

Shares of Pan Pacific International Holdings surged 14.91% after the operator of discount store Don Quijote raised its annual profit forecast.

Drugstore chains were also trading higher, with Matsukiyococokara rising 5.64% after the company reported gains in its quarterly profit and a share buyback.

Peer Sundrug jumped nearly 10% after increasing its dividend payout forecast.

Daiichi Sankyo surged 15.04% after U.S. drugmaker Seagen said an arbitrator had ruled in favor of the Japanese drugmaker over an agreement between the two companies for using its drug technology.

Daiichi Sankyo provided the biggest boost to the Nikkei, followed by technology investor SoftBank Group, which rose 4.85%.

Uniqlo clothing store owner Fast Retailing climbed 0.79% Bucking the upbeat mood, shares of Snow Peak tanked 14.72% after the camping gear retailer cut its annual profit forecast.

(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips)