Business / Financial Markets | TSE DATA & REPORT

Stocks rise further on U.S.-China trade hopes and weaker yen

JIJI

Tokyo stocks extended their gains Tuesday as risk-averse sentiment receded further following a senior U.S. official’s positive comment ahead of high-level trade negotiations between the United States and China and the yen’s fall against the dollar.

The Nikkei 225 average rose 73.68 points, or 0.35 percent, to end at 21,392.10 after gaining 118.85 points Monday.

The Topix, which covers all issues listed on the Tokyo Stock Exchange’s first section, was 6.88 points, or 0.44 percent, higher at 1,557.99. It added 14.01 points Monday.

The market opened comfortably higher with investors’ risk appetite enhanced by U.S. Treasury Secretary Steven Mnuchin’s remarks showing his optimism over the ministerial-level U.S.-China trade talks to be resumed next month, brokers said.

The Treasury chief reportedly said Washington and Beijing already have a “conceptual” agreement. This comment sent U.S. long-term interest rates higher and, as result, the dollar appreciated against the yen.

The market grew top-heavy after the initial surge. But both the Nikkei and Topix stayed in positive territory throughout the day thanks to the strength of financial and export-oriented issues, brokers said.

U.S. President Donald Trump’s comments Tuesday that there will be talks with China next week also supported the market, said Hirohumi Yamamoto, strategist at Toyo Securities Co.

On Tokyo stocks’ failure to keep rising, Yutaka Miura, senior technical analyst at Mizuho Securities Co., said, “Shanghai equities’ bleak performance weighed on the market.”

Meanwhile, Yamamoto indicated that the market’s downside was firm, saying that “investors have no reason to dump shares at a time when the U.S. and European central banks are expected to take further easing steps shortly.”

Rising issues outnumbered falling ones 1,357 to 729 on the first section, while 65 issues were unchanged.

Volume increased to 1.417 billion shares from 964 million Monday.

China-linked issues attracted purchases. Major gainers included industrial robot producer Fanuc and construction machinery maker Komatsu.

Automakers such as Toyota, Honda and Suzuki rose thanks to the weaker yen.

Interest rate-sensitive issues, such as mega-bank Mizuho Financial Group and brokerage giant Nomura Holdings, attracted buying.

Among other winners were clothing store chain Fast Retailing and technology investor SoftBank Group.

By contrast, drugmakers were hit by selling, with Daiichi Sankyo plunging 7.16 percent and Takeda losing 1.47 percent.

Also on the negative side were air conditioner maker Daikin and cosmetics maker Shiseido.

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