Japan Nikkei extends gain on US-China talk hopes

Headline indices of the Japan share market closed higher on Wednesday, 20 February 2019, as risk sentiments underpinned on tracking overnight gains on Wall Street after US-China trade talks resumed while investors awaited minutes from the US Federal Reserve for clues on policymakers' thinking on interest rates and its balance sheet reduction policy. Most of TSE33 issues inclined, with shares in nonferrous metal, wholesale trade, and marine transportation-linked issues comprised those that gained the most. At closing bell, the 225-issue Nikkei Stock Average ended up 128.84 points, or 0.6%, at 21,431.49. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 6.95 points, or 0.43%, higher at 1,613.47.

The two countries (US-China) started a new round of talks to resolve their trade war on Tuesday, and sessions at a higher level are planned later this week. US President Donald Trump said on Tuesday that trade talks with China were going well and suggested he was open to pushing off the deadline to complete negotiations, saying March 1 was not a "magical" date. Tariffs on $US200 billion worth of Chinese imports are currently scheduled to rise to 25% from 10% if no trade deal is reached by March 1.

 

Investors will also look to the release on Wednesday of minutes from the Federal Reserve's January policy-setting meeting, where policymakers took a dovish turn, effectively signalling no further rate hikes. New York Fed President John Williams endorsed such an outlook, suggested he is comfortable with the US interest rate level and sees no need to raise them again unless economic growth or inflation shifts.

In individual stocks trade, Honda jumped 2.2% after announcing it would shut down its UK plant.

Mitsui and Co. rose 1.1% and Mitsubishi Corp rose 0.9% after reports that leading Russian company Novatek asked the Japanese trading houses to invest in a major Arctic LNG project.

ECONOMIC NEWS: Japan Posts Trade Deficit At Y1,452.2 Billion In January -- Japan had a merchandise trade deficit of 1,452.2 billion yen in January, the Ministry of Finance said on Wednesday, following the 56.7 billion yen deficit in December. Exports were down 8.4% on year to 5.574 trillion yen, after dropping 3.9% in the previous month. Imports eased an annual 0.6% to 6.989 trillion yen after rising 1.9% a month earlier.

CURRENCY NEWS: The Japanese yen was softer against the greenback on Wednesday. The dollar rose to 110.79 yen from 110.63 yen on Tuesday.

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