Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks rebound on renewed hopes for China-U.S. trade deal

JIJI

Stocks bounced back on the Tokyo Stock Exchange on Wednesday, as investors accelerated buying amid growing hopes for an end to the U.S.-China trade row.

The 225-issue Nikkei average rallied 207.90 points, or 0.97 percent, to end at 21,713.21. On Tuesday, the key market gauge edged down 3.72 points.

The Topix index of all first-section issues finished up 10.08 points, or 0.63 percent, at 1,621.77, after falling 4.12 points the previous day.

After getting off to a mixed start, the market went up sharply on a Financial Times report that Washington and Beijing were “closer” to a final trade deal, brokers said.

The U.K. newspaper report hit the market before the start of ministerial negotiations between the Unites States and China in Washington on Wednesday.

Robust buying in Fast Retailing Co., a heavily weighted component of the Nikkei average, helped the key price indicator gain over 100 points, analysts pointed out.

The market remained comfortably higher in the afternoon on purchases prompted by rises in Shanghai stocks.

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said that an unexpectedly sharp improvement in China’s Caixin services purchasing managers’ index and U.S. stock index futures’ climb in off-hours trading also gave a boost to buying momentum.

“Concerns over a global economic slowdown receded” thanks to the brisk readings of Wednesday’s Chinese nonmanufacturing PMI and Monday’s U.S. Institute for Supply Management manufacturing index, Fujii added.

The Nikkei may test its recent high of 21,822 this week, if Wall Street advances further and the U.S.-China trade talks produce fruit, said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.

Rising issues outnumbered falling ones 1,480 to 588 in the TSE’s first section, while 71 issues were unchanged.

Volume fell to 1.292 billion shares from Tuesday’s 1.343 billion shares.

China-linked issues attracted purchases, with chipmaking gear manufacturer Tokyo Electron rising 2.85 percent, industrial robot producer Fanuc Corp. 2.72 percent and its peer Yaskawa Electric Corp. 2.67 percent.

Fast Retailing jumped 5.44 percent, thanks to a same-store sales rise at its Uniqlo casual clothing store chain in March.

Other major winners included technology investor Softbank Group Corp. and drugmaker Eisai Co.

Meanwhile, Megmilk Snow Brand Co. plunged 5.48 percent after Mizuho Securities Co. revised down its investment rating and target stock price for the dairy products maker.

Also sold were power supplier Tokyo Electric Power Holding Inc. and railway operator Central Japan Railway Co., or JR Tokai.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average climbed 250 points to end at 21,720.

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