By Stanley White
TOKYO (Reuters) - Japanese shares edged higher on Friday as cautious optimism about the prospect of the United States and China reaching a trade agreement lifted investor risk appetite.
At 0150 GMT the Nikkei index rose 0.61 % to 23,178.77 as exporters in the IT sector and the industrial equipment sector paced gains.
China is pushing to reach a preliminary trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday, in an attempt to allay fears talks might be unravelling.
China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing, the Wall Street Journal reported on Thursday, on hopes the talks can take place before next Thursday's Thanksgiving holiday in the United States.
Completion of a phase one deal could slide into next year, trade experts and people close to the White House told Reuters previously, as Beijing presses for more extensive rollback of U.S. tariffs that have weakened its exports and slowed its economy.
For the week, the Nikkei was on course for a 0.77% decline, its biggest since Oct. 4, highlighting concern about U.S.-China relations in the long term.
There were 173 advancers on the Nikkei index against 41 decliners on Friday.
The largest percentage gainers in the index were Internet services company Z Holdings Corp <4689.T> up 3.95%, followed by materials manufacturer Asahi Kasei Corp <3407.T> gaining 2.95% and Kobe Steel Ltd <5406.T> up by 2.36%.
Formerly known as Yahoo Japan, Z Holdings got a boost because it will merge with messaging app operator Line Corp <3938.T>. Shares in Line were unchanged on Friday.
The largest percentage losses in the index were online commerce company Rakuten Inc <4755.T> down 1.86%, followed by Nippon Light Metal Holdings Co Ltd <5703.T> losing 1.76%, and Suzuki Motor Corp <7269.T> down by 1.4%. The Topix index <.TOPX> rose 0.53% to 1,698.25, on course for a 0.1% weekly gain.
The volume of shares traded on the Tokyo Stock Exchange's main board <.TOPX> was 0.47 billion, compared to the average of 1.27 billion in the past 30 days.
(Editing by Sam Holmes)