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Japan Nikkei extends gain on China-U.S. trade progress

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Capital Market
Last Updated : Sep 06 2019 | 12:16 PM IST
Headline indices of the Japan share market advanced on Friday, 06 September 2019,as investor sentiment bolstered by tracking a strong session on Wall Street overnight after a slew of data reinforced confidence in the American economy and as positive news on the China-U.S. trade war front. At closing bell, the 225-issue Nikkei Stock Average advanced 91.12 points, or 0.43%, to 21,177.06, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 2.65 points, or 0.17%, at 1,537.11.

Total 26 sectors out of 33 sectors of Topix index inclined, with Machinery, Wholesale Trade, Transportation Equipment, Glass & Ceramics Products, and Insurance issues being notable gainers, while Electric Power & Gas, Information & Communication, Warehousing & Harbor Transportation Services, Mining, and Pulp & Paper issues were notable losers.

U.S. markets rose to their highest levels since the end of July during the trading day on Thursday after news emerged that the U.S. and China planned to hold negotiations in October. Markets in the U.S. were also spurred by data showing that private payrolls grew higher than the expected 195,000 in August. The Dow Jones Industrial Average soared 272.68 points or 1.41% while the S&P gained 38.22 or 1.3% and the Nasdaq jumped 139.95 or 1.75%. Trade developments hopes between the world's two biggest economies have spurred after China confirmed a new round of high-level trade talks in Washington set for early October. The impending talks rekindled hopes for progress after the two countries recently escalated tensions with fresh tariffs.

China announced the 13th round of high-level talks in its official media Thursday following a phone conversation between Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin. A statement issued by the Ministry of Commerce said the two sides agreed to take concrete action to promote favorable conditions for the talks and pledged to keep in close contact. Working teams were expected to begin negotiations in mid-September in advance of the October session.

Markets are expecting the U.S. Federal Reserve to cut interest rates at the Federal Open Markets Committee meeting Sept. 17-18 to stave off the effects of a slowing global economy.

Shares of exporters climbed on the back of yen depreciation against greenback. Automakers were notable higher, with Honda gaining 1.3%, Nissan up 1.7%, and Toyota rising 0.5%.

Shares of electronics producers were also higher, by data showing Japan's July household spending edging up 0.8% year-on-year, the eighth consecutive monthly increase, with Panasonic gaining 1.6% and Sharp up 1.7%.

More From This Section

ECONOMIC NEWS: Government data showed on Friday that household spending in the country rose for an eighth straight month in July, though the pace of growth was slower than expected. Household expenditure increased 0.8% in July as compared to a year earlier

CURRENCY NEWS: The Japanese yen depreciated against greenback on Friday, as demand for safe haven currency declined after a raft of data bolstered confidence in the American economy and trade tensions eased. The Japanese yen, often seen as a safe-haven currency in times of turmoil, traded at 107.02 against the dollar after weakening from levels below 106.4 in the previous session

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First Published: Sep 06 2019 | 11:42 AM IST

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