Japan Market rises on hopes for US-China trade talks

Headline indices of the Japan share market advanced on Friday, 11 October 2019, on tracking gains on the Wall Street overnight after the resumption of high-level trade talks in Washington between China and the United States raising expectations that progress could be made on the trade front by the two economic powerhouses. Around afternoon trade, the 225-issue Nikkei Stock Average advanced 230.33 points, or 1.07%, to 21,782.31, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange grew 11.85 points, or 0.75%, at 1,593.27.

Total 30 issues of the 33 industry category of Topix index inclined into positive territory, with Mining, Marine Transportation, Metal Products, Transportation Equipment, and Securities & Commodities Futures issues being notable gainers.

 

Investor sentiment got a boost on tracking gains on the Wall Street overnight which rose on hopes that top-level U.S.-China trade talks would yield at least a partial deal, after President Donald Trump tweeted he would meet Chinese Vice Premier Liu He on Friday for further trade talks and Liu said Beijing was willing to reach an agreement with Washington to prevent any further escalation in the trade war.

The US stock market finished higher on Thursday, 10 October 2019, as investors took an optimistic stance ahead of the resumption of high-level trade talks in Washington. At closing bell, the Dow Jones Industrial Average advanced 150.66 points, or 0.6% to 26,496.67. The S&P 500 gained 0.7% to 2,938.13 while the Nasdaq Composite climbed 0.6% to 7,950.78.

Trade negotiations between the United States and China resumed on Thursday for the first time since July 2019. The U.S. and China are currently in the midst of high-level trade negotiations in Washington.

Market participants remained focused on outcome of the trade talks in Washington D.C. between the U.S. and China with import tariffs set for $250 billion worth of Chinese goods at a rate of 30% from 25% on 15 October 2019. A 15% tariff on an additional $160 billion worth of Chinese imports is also expected to kick in on 15 December 2019. The world's two largest economies seek to reach a deal to end their protracted trade war that has seen tariffs slapped on billions of dollars worth of each other's goods since the start of 2018, battering financial markets and souring business and consumer sentiment, and driven worries over the global economic outlook.

Shares of Fast Retailing, the company behind apparel giant Uniqlo, surged almost 4% after the firm reported a record profit on Thursday, propelled by its strong Uniqlo Co. casual clothing brand sales in Asia and Oceania. The fashion retailer group net profit rose 5% to a record 162.58 billion yen in the fiscal year ended August 2019. Group operating profit climbed 9.1% to 257.64 billion yen on sales of 2.29 trillion yen, up 7.5%.

CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of uncertainty, depreciated against greenback on Friday, on hopes of progress in US-China trade talks and optimistic comments from Europe on Brexit. Irish Prime Minister Leo Varadkar said on Thursday a Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union in an orderly fashion, after what he called a very positive meeting with Boris Johnson. Ireland is a major factor in the prolonged Brexit impasse. The Japanese yen traded at 107.97 against the dollar after weakening from levels below 107.6 in the previous session.

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