Tokyo shares soar

2 July, 2019 12:00 AM printer

TOKYO: Tokyo shares soared Monday after the United States and China agreed a ceasefire in their trade war that has damaged the global economy.

The benchmark Nikkei 225 index rose 2.13 percent, or 454.05 points, to 21,729.97, while the broader Topix index ended up 2.17 percent, or 33.71 points, at 1,584.85.

“The market enjoyed a major rise,” Okasan Online Securities said in a note to clients.

“Investors welcomed the fact that the G20 ended without incident, as well as the resumption of the US-China trade talks,” it said.

Japan hosted this year’s Group of 20 meeting in Osaka last week, providing a forum to bring together US President Donald Trump and Chinese leader Xi Jinping for direct talks, reports AFP.

The two men agreed to resume trade negotiations and halt fresh tariffs, allowing the rest of the world to breathe a sigh of relief.

Trump also said US businesses would be allowed to sell products to Chinese telecom giant Huawei as long as it doesn’t pose national security concerns.

That remark also helped lift the market, particularly tech shares. “As the sense of caution receded, investors’ spirit improved and pushed up shares,” Okasan said.

The dollar rose against the yen in a favourable development for Japanese exporters, changing hands at 108.44 yen compared with 107.82 yen in New York on Friday.

The central Bank of Japan released a business sentiment survey just before the opening bell, with the headline index among major manufacturers falling in the second quarter to June.

But Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Centre, noted the survey had been taken before the weekend news.

The US-China truce accord “showed things won’t follow the much-feared, worse-case scenario”, he said.