Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks surge to 20,704 on latest bout of optimism on U.S-China trade

JIJI

Tokyo stocks rallied Friday as sentiment was brightened by renewed expectations for progress in U.S.-China trade negotiations.

The 225-issue Nikkei average jumped 243.44 points, or 1.19 percent, to end at 20,704.37. On Thursday, the key market gauge fell 18.49 points.

The Topix index of all issues listed on the Tokyo Stock Exchange’s first section went up 21.69 points, or 1.46 percent, to 1,511.86, after losing 0.18 point the previous day.

Stocks attracted buying across the board from the outset, with investors taking heart from Wall Street’s continued advance Thursday, which was brought about by media reports that working-level consultations between Washington and Beijing were going on over proposed ministerial-level trade talks in September, brokers said.

The yen’s weakening against the dollar also lifted sentiment.

But after the early morning buying spree, the market failed to advance much further as players increasingly retreated to the sidelines ahead of the weekend, brokers said.

“The Tokyo market welcomed” the reported comments by a Chinese commerce ministry spokesman confirming the ongoing efforts to reopen trade talks between the two economic superpowers, Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said.

“With no negative news on the U.S.-China trade front in sight, investors stepped up purchases of undervalued stocks,” said Hirohumi Yamamoto, strategist at Toyo Securities Co.

Though concerns over another escalation in the U.S.-China trade war have receded yet again, participants were reluctant to boost buying volume because it remained to be seen whether the ministerial-level trade talks would actually take place, a brokerage house official pointed out.

Rising issues overwhelmed falling ones 1,970 to 144 in the first section, while 35 issues were unchanged.

Volume increased to 1.207 billion shares from Thursday’s 991 million shares.

Automakers including Toyota, Nissan and Honda gained ground thanks to the weaker yen.

Financials benefited from their U.S. counterparts’ advance and a rise in U.S. long-term interest rates. They included mega-bank Mitsubishi UFJ, brokerage giant Nomura and insurer Dai-ichi Life.

Among other winners were industrial robot producer Fanuc and job information service firm Recruit Holdings.

On the other hand, clothing store chain Fast Retailing snapped its three-day winning streak.

Also on the negative side were automaker Suzuki and air conditioner manufacturer Daikin.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 230 points to end at 20,690.

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