Business / Financial Markets

Tokyo stocks surge on receding trade war woes

JIJI

Stocks soared Tuesday on the Tokyo Stock Exchange, with concerns over a U.S.-China trade war receding somewhat.

The 225-issue Nikkei average gained 551.22 points, or 2.65 percent, to close at the day’s high of 21,317.32, after rising 148.24 points Monday.

The Topix index of all first-section issues ended up 45.81 points, or 2.74 percent, at 1,717.13, also the highest level for the day, after climbing 6.38 points Monday.

Stocks attracted hefty purchases from the outset of Tuesday’s trading, following Wall Street’s spectacular rally Monday.

The U.S. market’s rebound came as concerns over escalation in U.S.-China trade friction eased partly thanks to a media report that the two countries have launched behind-the-scenes negotiations to avoid a trade war, brokers said.

After ending the morning session up some 340 points, the Nikkei rose further in the afternoon, after former Ministry of Finance official Nobuhisa Sagawa in a sworn Diet testimony denied there were instructions from the Prime Minister’s Office to tamper documents related to a controversial sale of state land to school operator Moritomo Gakuen.

Sagawa, former director-general of the ministry’s Financial Bureau, did not say anything to damage the administration of Prime Minister Shinzo Abe, market sources said.

Tuesday’s surge was led by “buybacks apparently by foreign investors” amid diminishing worries over a global trade war, a bank-affiliated securities official said.

Meanwhile, Ryuta Otsuka, a Toyo Securities Co. strategist, cited “short-term speculative buying.”

Yutaka Miura, senior technical analyst at Mizuho Securities Co., said the yen’s weakening against the dollar also brightened investor sentiment.

Market participants were relieved for now, after Sagawa’s testimony, Miura said, while indicating that players need to keep a close tab on public support rates for Abe’s Cabinet.

Rising issues far outnumbered falling ones 1,966 to 105 on the TSE’s first section, while 13 issues were unchanged.

Trading volume rose to 1.643 billion shares from Monday’s 1.577 billion shares.

Construction machinery-makers Komatsu Ltd., Hitachi Construction Machinery Co. and Kubota Corp. attracted buying.

Financial issues, including megabank groups Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc., and insurers Dai-ichi Life Holdings Inc. and Sompo Holdings Inc., were upbeat after their U.S. peers fared well Monday.

Among other major winners were clothing retailer Fast Retailing Co. and mobile phone carrier SoftBank Group Corp.

Losers included electronics giants Toshiba Corp. and Sharp Corp.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average shot up 630 points to 21,110.