Japan Nikkei rises ahead of G-20

Headline indices of the Japan share market advanced for the first time in three sessions in row on Thursday, 27 June 2019, as risk sentiments boosted by a halt in the yen's appreciation against greenback, with investors focused on this week's Group of 20 summit and key US-China trade talks on the sidelines in Osaka in western Japan. Total 30 subsectors out of 33 subsectors of the Topix's index inclined, with Machinery, Marine Transportation, Oil & Coal Products, Glass & Ceramics Products, and Securities & Commodities Futures issues being notable gainers, while Fishery, Agriculture & Forestry and Pharmaceutical issues were notable losers. At closing bell, the 225-issue Nikkei Stock Average advanced 1.2%, or 251.58 points, to 21,338.17, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange grew by 1.23%, or 18.93 points, at 1,553.27.

Investors looked toward developments on the U.S.-China trade front, with Presidents Donald Trump and Xi Jinping set to meet at the June 28-29 G20 summit in Osaka. The two leaders are expected to discuss the protracted trade fight between their two countries. Investors are focusing on whether the two leaders can pave the way to resolve a trade dispute between the world's two biggest economies. Market expectations for a meaningful breakthrough being achieved in U.S.-China trade talks are quite low, so any signs of an improvement could bode well for risk sentiment.

The potential implications of the Trump-Xi meeting for US monetary policy are huge. If the two sides agree not to impose more tariffs, the Fed would no longer need to cut rates. On the contrary, if the talks point to the imposition of more tariffs, that could nudge hesitant policymakers towards rate cuts.

China-linked shares were higher, with electronic parts maker Rohm rallying 4% and industrial robot maker Fanuc up 1.4%. Automakers were also higher, with Honda gaining 1.4%, Nissan up 1.8%, and Toyota up 0.5%.

ECONOMIC NEWS: Japan Retail Sales Up 0.3% On Month In May -- Japan retail sales were up a seasonally adjusted 0.3% on month in May, the Ministry of Economy, Trade and Industry said on Thursday following the downwardly revised 0.1% drop in April (originally flat). On a yearly basis, retail sales were up 1.2%, up from the downwardly revised 0.4% increase in the previous month (originally 0.5%).

CURRENCY NEWS: Japanese yen, often seen as a safe-haven currency, tad softened against greenback on Thursday. The dollar fetched 107.67 yen in Asian trade, against 107.78 yen in New York, and up from below 107.50 levels in Tokyo yesterday.

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