Japanese stocks rose to a three-month high on Monday, as US President Donald Trump's threats against China over new security laws for Hong Kong were less threatening than feared.

The benchmark Nikkei average gained 1.2% to 22,135.75 by the midday break, a high last seen in late February.

The rally was led by short-covering as some investors had worried Trump could ditch his trade deal with China or call an immediate end to privileges to Hong Kong after the Chinese parliament passed new security legislation for the semi-autonomous city last week.

Investors are now focused on the global economic recovery as more countries gradually move to re-open their economies -- the main driving force of the market's rally since late March.

Clouding the outlook, however, are jitters over protests and riots in many US cities after an unarmed black man died in police custody in Minneapolis last week.

Highly cyclical securities brokerages and shippers were among best-performing sectors on the main bourse, up 2.3% and 1.8%, respectively.

Chipmaking-related stocks also did well after the US Philadelphia semiconductor index gained 2.7% on Friday on hopes of strong demand related to new technologies such as 5G wireless communications.

Screen Holdings Co Ltd climbed 5.3%, while Tokyo Electron rose 4.1% and Advantest Corp jumped 6.4%.

Elsewhere, the index of Mothers start-up shares advanced as much as 2.0% to clear the 1,000 mark for the first time since early December 2018.

The broader Topix edged up 0.5% to 1,571.34 though decliners outnumbered gainers by a ratio of 54 to 46.

Reuters