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Nikkei rebounds as trade war fears recede

JIJI

The Tokyo Stock Exchange bounced back Thursday as investor worries about a trade war eased to some extent.

The 225-issue Nikkei average gained 115.35 points, or 0.54 percent, to end at 21,368.07 after losing 165.04 points Wednesday.

The Topix index of all first-section issues closed up 5.99 points, or 0.35 percent, at 1,709.95. It shed 12.34 points the previous day.

The Tokyo market got off to a robust start after White House spokeswoman Sarah Sanders hinted Wednesday at the possibility of Mexico, Canada and other countries escaping its planned U.S. steel and aluminum import tariffs.

A halt to the yen’s advance against the dollar also lifted investor sentiment, brokers said.

But the market’s topside grew heavy after the initial spurt, with players deciding to sit on the fence ahead of U.S. President Donald Trump’s signing of the tariffs expected by the end of the week, they said.

In early trading, investors took a cue from active buybacks on Wall Street in the wake of Sanders’ comment, an official at a bank-affiliated brokerage house said.

Responding to a question about the tariffs at the Wednesday press briefing, she said, “There are potential carve-outs for Mexico and Canada based on national security, and possibly other countries, as well, based on that process.”

Hideyuki Suzuki, head of investment market research at SBI Securities Co. noted that the U.S. Nasdaq index’s rise buoyed the technology sector in Tokyo.

But the market came under increased selling pressure in late-afternoon trading as caution grew not only due to Trump’s tariffs, but also the U.S. February jobs report that will come out Friday, brokers said.

If the report shows stronger-than-expected numbers this time again, both U.S. and Japanese stocks may suffer sell-offs as in the previous month, due to heightened concerns about an interest rate hike and inflation in the United States, according to Hiroaki Hiwada, strategist at Toyo Securities Co.

Although the Nikkei and Topix both ended higher, falling issues outnumbered rising ones 1,042 to 938 in the TSE’s first section, while 90 issues were unchanged.

Volume fell to 1.225 billion shares, from 1.467 billion shares Wednesday.

Semiconductor-related Tokyo Electron Ltd., Advantest Corp. and Shin-Etsu Chemical Co. were buoyant reflecting their U.S. peers’ briskness Wednesday.

Other major winners included drugmaker Eisai Co. and game-maker Nintendo Co.

By contrast, daily-goods-manufacturer Kao Corp. was hit by profit-taking after its recent advance.In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 180 points to 21,380.