Stocks staged a sharp rally Monday as concerns over an escalation in the U.S.-China trade conflict receded.
The Nikkei 225 average rocketed 454.05 points, or 2.13 percent, to end at 21,729.97, its highest finish since May 7. On Friday, the key market gauge dropped 62.25 points.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, closed 33.71 points, or 2.17 percent, higher at 1,584.85 after falling 2.13 points Friday.
The market surged right after the opening bell amid a sense of relief spreading following Saturday’s meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, brokers said.
Meeting on the sidelines of the Group of 20 summit in Osaka, Trump and Xi agreed to restart bilateral trade talks. Trump also said his administration will not slap tariffs on additional Chinese goods worth $300 billion, at least for the time being, and suggested the possibility of easing restrictions on trade with China’s Huawei Technologies Co.
The dollar’s strengthening against the yen gave another boost to Tokyo stocks.
After buying paused later in the morning, the market resumed its rally in the afternoon thanks to robust Shanghai stocks and a climb in Dow Jones Industrial Average futures in off-hours trading, brokers said.
The day’s rise was led by buybacks of shares affected by the dispute between the Trump administration and Huawei, particularly semiconductor-linked issues such as chipmaking gear manufacturer Tokyo Electron, brokers said.
Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said investors rushed to repurchase shares they had sold after “Trump unexpectedly clarified that companies can sell to the Chinese technology giant products posing no national security risk (to the United States).”
Meanwhile, Yutaka Miura, senior technical analyst at Mizuho Securities Co., said the market was pressured to some extent by the Japanese government’s announcement that it will tighten regulations on exports of three kinds of semiconductor-related materials to South Korea.
Rising issues trounced falling ones 2,010 to 108 in the first section, while 30 issues were unchanged.
Volume increased to 1.202 billion shares from 1.151 billion Friday.
Among shares bought back actively, Tokyo Electron jumped 4.76 percent and industrial robot maker Fanuc 3.06 percent.
DVD rental shop operator Geo Holdings soared 6.74 percent after the firm announced a plan to repurchase its own stocks.
Game maker Nintendo and clothing store chain Fast Retailing attracted buying as well.
By contrast, Chiyoda plunged 2.08 percent after the plant engineering firm said it will be demoted to the TSE’s second section.
Losers also included restaurant chain Pepper Food Service and cybermall operator Rakuten.