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Tokyo shares soar on US-China trade detente
TOKYO, July 1, 2019 (BSS/AFP) – Tokyo shares soared Monday after the
United States and China agreed a ceasefire in their trade war that has
damaged the global economy.
The benchmark Nikkei 225 index rose 2.13 percent, or 454.05 points, to
21,729.97, while the broader Topix index ended up 2.17 percent, or 33.71
points, at 1,584.85.
“The market enjoyed a major rise,” Okasan Online Securities said in a note
to clients.
“Investors welcomed the fact that the G20 ended without incident, as well
as the resumption of the US-China trade talks,” it said.
Japan hosted this year’s Group of 20 meeting in Osaka last week, providing
a forum to bring together US President Donald Trump and Chinese leader Xi
Jinping for direct talks.
The two men agreed to resume trade negotiations and halt fresh tariffs,
allowing the rest of the world to breathe a sigh of relief.
Trump also said US businesses would be allowed to sell products to Chinese
telecom giant Huawei as long as it doesn’t pose national security concerns.
That remark also helped lift the market, particularly tech shares.
“As the sense of caution receded, investors’ spirit improved and pushed up
shares,” Okasan said.
The dollar rose against the yen in a favourable development for Japanese
exporters, changing hands at 108.44 yen compared with 107.82 yen in New York
on Friday.
The central Bank of Japan released a business sentiment survey just before
the opening bell, with the headline index among major manufacturers falling
in the second quarter to June.
But Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Centre,
noted the survey had been taken before the weekend news.
The US-China truce accord “showed things won’t follow the much-feared,
worse-case scenario”, he said.
“If the survey was taken today or tomorrow, the outcome would be
different,” he told AFP.
Industrial robot maker Fanuc rose 3.06 percent to 20,540 yen, Toyota
gained 2.78 percent to 6,874 yen and Sony added 2.35 percent to 5,781 yen,
with Nintendo up 1.42 percent at 40,050 yen.
Tokyo announced Monday it will impose trade restrictions on Japan-made
substances used by South Korea’s chip and smartphone makers.
The announcement prompted share of firms producing the affected materials
to plunge.
Among them JSR, which makes affected products such as the photosensitising
agent resist used in chip manufacturing, dropped 2.00 percent to 1,667 yen.
BSS/AFP/HR/1410