Japan Nikkei rises on Wall Street's lead

The Japan share market were edge higher on Thursday, 06 June 2019, as positive lead from Wall Street overnight offset by worries over global growth after the US and Mexico failed to reach a deal to avert proposed tariffs. Total 33 subsectors of the Topix's were in positive territory, with Information & Communication, Air Transportation, Rubber Products, Land Transportation, and Other Financial Business issues being notable gainers, whereas Oil & Coal Products, Marine Transportation, Mining, Iron & Steel, and Nonferrous Metals issues were notable losers around late afternoon, the 225-issue Nikkei Stock Average advanced 0.26%, or 53.25 points, to 20,829.35, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange grew 0.07%, or 1.03 points, at 1,531.11.

Local market received a boost from gains in the Wall Street overnight on growing hopes that the Federal Reserve will lower interest rates this year to reignite an economy wounded by trade battles. Powell said the central bank will keep an eye on current developments in the economy, and would do what it must to sustain the expansion. The Dow Jones Industrial Average rose 207.39 points to 25,539.57, while the S&P 500 advanced 0.8% to 2,826.15. The Nasdaq Composite closed 0.6% higher at 7,575.48.

 

However, market topside capped, as investors risk sentiment remains fragile as optimism over monetary policy is offset by ongoing concerns over trade after a meeting between U.S. and Mexican officials ended with scant sign of progress.

The U.S. and Mexico failed to reach a deal on immigration issues during a Wednesday meeting, just days before 5% tariffs on all Mexican imports are set to kick in. Talks will resume on Thursday. Progress is being made, but not nearly enough!" Trump said in a tweet on Wednesday evening. Trump announced those duties in a surprise tweet last week, saying they would be imposed until such time as illegal migrants coming through Mexico, and into our Country, STOP.

The most recent U.S. tariff threat on Mexico has led several market experts to forecast increased risk of a recession in the world's largest economy, which could put pressure on the Federal Reserve to cut rates.

CURRENCY NEWS: Japanese yen edged up against greenback on Thursday, as demand for safe heaven resumed on fear that looming U.S. trade war with Mexico would further depress global growth. The yen was at 108.27 per dollar, up 0.2%.

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