Japan’s Stocks Advance on Optimism US-China Tensions to Ease
Japanese stocks rose, with the Topix heading for a 12-day rally, on optimism trade tensions between the US and China may begin to de-escalate after two days of talks over the weekend.
The benchmark index climbed 0.3% to 2,740.91 as of 9:04 a.m. Tokyo time, set to complete its longest advance since October 2017. The Nikkei 225 Stock Average rose 0.4% to 37,646.88. Out of 1,689 stocks in the broader Topix, 1,115 rose and 411 fell, while 163 were unchanged.
The US and China both reported “substantial progress” after talks in Switzerland aimed at de-escalating a trade war, though neither side announced specific measures. Chinese Vice Premier He Lifeng said the world’s two biggest economies agreed to create a mechanism for further talks.
“It’s not yet clear what exactly is involved, so we’ll have to wait and see what comes out going forward,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “The yen is weakening, and at the very least, there doesn’t seem to be a negative market reaction. As we wait for specific announcements, the general trend of recovery is likely to continue.”
Shares of Japanese drugmakers slumped after President Donald Trump said he plans to order a cut in US prescription drug costs by mandating that Americans pay no more than people in countries that have the lowest price. Daiichi Sankyo Co. dropped 3.2%, while Kissei Pharmaceutical Co. fell 2.3%.
The Nikkei 225 has climbed 5% through Friday since Trump announced so-called reciprocal tariffs on April 2, among the best performing major markets. Japan last month was one of the first countries to formally engage in talks with the US, though agreement is yet to be made.
Japanese Prime Minister Shigeru Ishiba intends to reach a trade agreement with the US in July, around the time of the upper house election, Asahi newspaper reported, citing government sources it didn’t identify.
Investors are also watching closely earnings results and outlook from Japanese companies, with firms including SoftBank Group Corp., Nissan Motor Co. and Sony Group Corp. scheduled to report this week.
Source: Bloomberg
