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Tokyo stocks extend gains on U.S.-Mexico trade deal

JIJI

Stocks gained further ground, albeit slightly, on the Tokyo Stock Exchange on Tuesday, after a new U.S.-Mexico trade deal eased investor concerns over global trade friction.

The 225-issue Nikkei average edged up 13.83 points, or 0.06 percent, to end at 22,813.47 after briefly rising above the 23,000 mark for the first time in two and a half months. The key market yardstick extended its winning streak to a sixth session, after adding 197.87 points on Monday.

The Topix index of all first-section issues closed up 2.68 points, or 0.16 percent, at 1,731.63. It advanced 19.75 points the previous day.

Buying outpaced selling from the outset of Tuesday’s session, with market mood brightened by brisk U.S. stocks overnight after U.S. President Donald Trump announced Monday that his country has reached a broad agreement with Mexico to revise the North American Free Trade Agreement, brokers said.

The Nikkei briefly advanced more than 200 points to top 23,000 on an intraday basis for the first time since June 12.

But the market lost steam and gave up most of earlier gains in the afternoon, hurt by profit-taking, brokers said.

“The market became top-heavy in the afternoon as it was hit by selling on rallies,” an official of a bank-affiliated securities company said.

The market lacked the power to send the Nikkei firmly above 23,000, the official added, citing continuing low levels of trading value.

Masayuki Otani, chief market analyst at Securities Japan Inc., pointed to some signs of overheating in the market after the Nikkei’s six straight session of gains.

Rising issues outnumbered falling ones 1,018 to 982 in the TSE’s first section, while 105 issues were unchanged.

Volume increased to 1.2 billion shares from 1.05 billion shares on Monday.

China-linked issues gained ground after their U.S. peers fared well overnight following the announcement of the U.S.-Mexico agreement. Major gainers included construction machinery makers Komatsu and Hitachi Construction, as well as industrial robot-producer Fanuc.

Toyota climbed 0.86 percent after the automaker’s announcement on Tuesday that it will invest $500 million in Uber Technologies Inc. of the United States to promote the development of ride-hailing services using self-driving technologies.

Among other major winners were shipping firm Nippon Yusen and mobile phone carriers SoftBank Group and KDDI.

By contrast, Skylark lost 3.92 percent after Mizuho Securities Co. lowered on Monday its investment rating and stock price target for the restaurant chain operator, brokers said.

Also on the minus side were clothing retailer Fast Retailing and cosmetics maker Shiseido, as well as game-maker Nintendo.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 30 points to end at 22,800.