Japan Nikkei surges on Sino-U.S. trade optimism

Headline indices of the Japan share market surged on Monday, 18 February 2019, as risk appetite buying underpinned after better than expected domestic core machinery orders and reports of the continuation of trade talks between Chinese and American officials in Washington this week. At closing bell, the 225-issue Nikkei index added 389.08 points, or 1.86%, to end at 21,289.71. The broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 24.35 points, or 1.54%, at 1,601.64.

Japanese stocks received a lift after Wall Street surged on Friday as the United States and China reported progress in five days of negotiations in Beijing last week. After the markets closed on Friday, China and the U.S. announced plans to resume trade negotiations in Washington, fueling hopes that both countries were edging toward a deal.

We feel we have made headway on very, very important and difficult issues, U.S. Trade Representative Robert Lighthizer said, in a meeting with Chinese President Xi Jinping. Xi expressed hope for a mutually beneficial and win-win agreement, according to the official Xinhua News Agency. A tariffs truce expires March 2 and will leave the U.S. free to more than double import taxes on $200 billion in Chinese goods. President Donald Trump has said he may hold off on these if the country was close to a deal with China.

Exporters shares that derive a large portion of their sales in China advanced. Industrial machinery maker Komatsu Ltd added 2.7%, robot maker Fanuc Ltd rose 2.8percent and Hitachi Construction Machinery Co added 4.4%.

Tyre maker Bridgestone Corp gained 5.4% after the company said it will buy back up to 200 billion yen ($1.81 billion), or 7.6%, of its outstanding stock through 23 Dec. 2018.

Restaurant chain operator Hotland Co rose 4.5% after the company forecast its 2019 operating profit would jump by 88.2% to 1.62 billion yen.

Leopalace 21 Corp shares fell 8%, falling about 60% in value during the past six sessions, after apartment construction and leasing company being charged with construction code violations and posting losses related to repair costs.

ECONOMIC NEWS: Japan's core machinery orders fell 0.1% to 862.6 billion yen in December 2018 from the previous month, according to the Cabinet Office. The latest reading follows a 0.02% retreat in November, the Cabinet Offices data showed. Manufacturers surveyed by the Cabinet Office have forecasted that core orders, which exclude those of ships and from electric power utilities, will fall 1.8% in January-March after declining 4.2% in October-December.

CURRENCY NEWS: The Japanese yen was little changed slightly against the greenback on Mnday. The dollar was quoted at 110.55-56 yen compared with 110.42-52 yen in New York and 110.31-33 yen on Friday in Tokyo. The euro, meanwhile, fetched 124.87-88 yen against 124.67-77 yen in New York and 124.42-46 yen in late Friday afternoon trade in Tokyo.

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