Tokyo stocks up for seventh session on U.S.-China trade truce

JIJI

Stocks continued their bull run for the seventh consecutive session Monday after the United States and China struck a temporary truce Saturday in their trade dispute.

The Nikkei 225 average rose 223.70 points, or 1.00 percent, to end at 22,574.76 after rising nearly 350 points to hit a level unseen since mid-October on an intraday basis. On Friday, the key market gauge added 88.46 points.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 21.60 points, or 1.30 percent, higher at 1,689.05 after gaining 7.98 points Friday.

A broad range of issues attracted buy orders from the outset, after U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to a 90-day suspension of new U.S. tariffs on Chinese imports when they met on the sidelines of a Group of 20 summit in Buenos Aires, brokers said.

The signing on Friday of the United States-Mexico-Canada Agreement, or USMCA, an update of the North American Free Trade Agreement, was another positive factor for stock prices, brokers said.

“Investors who assumed the worst bought back stocks” following the U.S.-China agreement, an official of a bank-affiliated securities firm said.

The agreement was not a “big surprise” as there had been many media reports suggesting progress in U.S.-China talks, the official said, adding that the latest development between the world’s largest economies alone “would not shore up the global economy.”

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., expressed hope for a further recovery in stock prices later this year thanks to the 90-day trade war cease-fire and growing expectations for a halt to U.S. Federal Reserve interest rate hikes.

“The trade issue and rate hikes have weighed on Tokyo stocks this year,” Fujii said.

Risings issues outnumbered falling ones 1,579 to 472 in the TSE’s first section, while 68 issues were unchanged.

Volume decreased to 1.340 billion shares from 1.819 billion Friday.

Automakers were buoyant after the USMCA deal, brokers said. Toyota gained 3.37 percent, Mazda 3.26 percent and Subaru 3.33 percent.

China-linked issues attracted purchases as concerns over U.S.-China trade friction receded to some extent. Major gainers included industrial robot producers Fanuc and Yaskawa Electric, and construction machinery maker Komatsu.

Other major winners included mobile phone carrier SoftBank Group and game maker Nintendo.

On the other hand, drugmaker Takeda and clothing retailer Fast Retailing closed lower.