Japan Nikkei extends gains on easing trade war, weaker yen

Headline indices of the Japan share market advanced to four-month high on Thursday, 12 September 2019, as risk sentiment bolstered and on comparatively weak yen versus the dollar and on signs of a thaw in U.S.-China trade frictions. Meanwhile expectations of interest rates cut by the U.S. Federal Reserve and the European Central Bank and hopes of stimulus package unveil by the Germany also underpinned the market mood. At closing bell, the 225-issue Nikkei Stock Average advanced 205.66 points, or 0.95%, to 21,803.37, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 15.14 points, or 0.96%, at 1,598.80.

Total 30 sectors out of 33 sectors of Topix index inclined, with Air Transportation, Other Products, Electric Power & Gas, Machinery, Mining, and Electric Appliances issues being notable gainers, while Pulp & Paper and Fishery, Agriculture & Forestry issues were notable losers.

Investors expectation for a thaw in US-China trade frictions underpinned as U.S. President Donald Trump said on Wednesday that increased tariffs on 250 billion dollars worth of Chinese goods (25% to 30%) that were set to kick in on October 1 have now been delayed to October 15 as a gesture of good will. Trump said the decision was made at the request of Chinese Vice Premier Liu He and in consideration of the 70th anniversary celebrations of the People's Republic of China.

The world's two largest economies have been locked in a year-long battle over Beijing's trade practices that has threatened to push other economies into recession. The gestures of goodwill raise hopes both sides can narrow their differences before working-level resume talks in mid-September and high-level trade negotiations that are expected in October.

Investors also await an ECB meeting later on Thursday to see how far policymakers will go to support a flagging economy, given the risks posed by Britain's divorce from the European Union, commonly referred to as Brexit.

Shares of cyclical companies such as manufactures of semiconductor and robotics, which are seen as closely dependent on demand in China, rose sharply. Fanuc Corp rose 2.2% and Keyence Corp gained 1.4%. Advantest gained 4.4% and Tokyo Electron climbed 3.3% to a 15-month high.

ECONOMIC NEWS: Japan Core Machine Orders Down 6.6% On Month In July -- Japan core machine orders were down a seasonally adjusted 6.6% on month in July, the Cabinet Office said on Thursday - coming in at 896.9 billion yen, following the 13.9% surge in June. On a yearly basis, core machine orders rose 0.3% following the 12.5% gain in the previous month.

Japan Producer Prices Down 0.3% On Month In August - Japan producer prices were down 0.3% on month in August, the Bank of Japan said on Thursday following the flat reading in July. On a yearly basis, producer prices sank 0.9% following the 0.6% decline in the previous month. Export prices were down 1.2% on month and 5.7% on year, the bank said, while import prices dropped 0.5% on month and 8.3% on year in August.

CURRENCY NEWS: The Japanese yen depreciated against greenback on thursday, as demand for safe haven currency reduced on signs of a thaw in U.S.-China trade frictions and expectation of stimulus measures from major economies to support ailing economic growth. The Japanese yen, often seen as a safe-haven currency in times of turmoil, traded at 108.12 against the dollar after weakening from levels around 106.8 earlier this week.

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