Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks climb on word of a partial U.S.-China trade accord

JIJI

Word of a partial trade accord between the United States and China lifted Tokyo stocks broadly higher Tuesday, sending the Nikkei 225 average to a six-month high.

The Nikkei surged 408.34 points, or 1.87 percent, to end at 22,207.21, the best finish since April 26. On Friday, the key market gauge gained 246.89 points. The market was closed Monday for a national holiday.

The Topix, which covers all issues on the first section of the Tokyo Stock Exchange, ended 24.93 points, or 1.56 percent, higher at 1,620.20 after jumping 13.85 points Friday.

Investors rushed to buy from the outset, cheering the “phase one” U.S.-China trade deal announced Friday, brokers said.

According to U.S. President Donald Trump, the partial accord includes Washington’s suspension of a tariff hike on $250 billion of Chinese goods slated for Tuesday, China’s purchases of more American farm products and its further opening of domestic financial markets.

The market stayed buoyant throughout the session, also supported by the yen’s weakening against the dollar, brokers said.

“Players welcomed the partial agreement,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

But Miura quickly pointed out that the accord still remains a “verbal promise.”

“Whether the deal will actually be put into writing needs to be watched closely,” he said.

Hirohumi Yamamoto, strategist at Toyo Securities Co., said he was surprised to see the Tokyo market surge because the U.S.-China agreement “is not a done deal.”

“Probably short-term players were main buyers,” Yamamoto added.

Rising issues far outnumbered falling ones 1,898 to 214 on the first section, while 42 issues were unchanged.

Volume grew to 1.284 billion shares from 1.197 billion Friday.

Export-oriented issues such as automaker Toyota and camera maker Canon attracted purchases thanks to the yen’s drop.

Obayashi, Shimizu and other contractors rose on expectations for growth in reconstruction demand in areas battered by extremely powerful typhoon Hagibis.

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

On the other hand, a handful of losers included job information provider Recruit Holdings and oil wholesaler Idemitsu.