Stocks turned sharply higher on the Tokyo Stock Exchange on Thursday, supported by hopes for progress in U.S.-China trade talks.
But trading remained subdued as investors continued to refrain from active trading to see the outcome of a meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, to be held Saturday on the sidelines of the two-day Group of 20 summit starting in Osaka on Friday.
The 225-issue Nikkei average rose 251.58 points, or 1.19 percent, to end at 21,338.17, after losing 107.22 points on Wednesday.
The Topix index of all first-section issues closed up 18.93 points, or 1.23 percent, at 1,553.27. It sagged 9.15 points the previous day.
Buying took the upper hand from the outset of Thursday’s trading, with investor sentiment lifted by the yen’s weakening against the dollar, brokers said.
The market accelerated its upswing later in the morning, helped by hopes for progress in U.S.-China trade talks after the South China Morning Post reported that Washington and Beijing have tentatively agreed to another truce in their trade war.
Both the Nikkei and Topix indexes maintained their strength in the afternoon and ended at intraday highs, also aided by higher equities in other Asian markets, brokers said.
The newspaper report “provided solace to the market that the United States and China will likely avoid a breakdown in their trade talks,” said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.
But optimism cannot be warranted until the outcome of the Trump-Xi talks is confirmed, Fujii said, noting Trump’s threat to impose additional tariffs on Chinese imports if no progress is made at the bilateral summit.
Rising issues outnumbered falling ones 1,711 to 375 in the TSE’s first section, while 61 issues were unchanged.
Volume increased to 1.20 billion shares from 935 million Wednesday.
China-linked issues and cyclicals attracted purchases thanks to the newspaper report, with industrial robot producer Yaskawa Electric surging 4.62 percent and shipping firm Kawasaki Kisen jumping 4.60 percent.
Semiconductor-related issues, including Tokyo Electron and Advantest, continued to rise after their U.S. peers fared well Wednesday.
Among other major winners were technology investor SoftBank Group and game maker Nintendo.
By contrast, drug makers met with selling, with Daiichi Sankyo ending down 1.16 percent, Shionogi down 1.0 percent and Takeda down 0.86 percent.
Also on the negative side were clothing store chain Fast Retailing and tobacco maker JT.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average advanced 210 points to end at 21,260.