Japan’s Topix Set for Longest Rally Since 2009 on US-China Deal
Japanese stocks rose, putting the Topix on track for its longest winning streak in 16 years, after the US and China agreed to de-escalate tariffs, boosting risk-on sentiment and sending the yen lower.
The benchmark gauge rose as much as 1.9% in early Tokyo trade, heading for a 13th straight day of gains, the most since August 2009. The blue-chip Nikkei 225 Stock Average was up as much as 2.3%.
The climb comes after the US slashed duties on Chinese products to 30% from 145% for a 90-day period, while Beijing dropped its levy on most goods to 10%, following two days of high-stakes talks in Switzerland. The announcement came after Japan’s stock market closed on Monday.
The yen tumbled more than 2% overnight against the dollar as the US-China trade truce boosted risk appetite and eroded demand for traditional haven assets. In the US, big tech rallied and the S&P 500 surged more than 3%.
The tariff easing will likely drive buying of large exporters, which significantly impact the broader market and will lift Japan’s stock benchmarks higher, said Yutaka Miura, senior technical analyst at Mizuho Securities. Electronics makers like Nintendo Co. and Hitachi Ltd. were contributing most to the Topix’s rise as of 9:05 a.m.
Investors are still waiting for a trade agreement between Japan and the US after the Asian nation became one of the first countries to formally engage in talks. Prime Minister Shigeru Ishiba intends to reach an agreement with the US in July, according to the Asahi newspaper.
The US-China agreement makes it “more likely there is a deal between Japan and the US,” said Kelvin Leung, a portfolio manager at Robeco Hong Kong.
However, “I’m more worried about the fast optimism in Japan,” he said. “Judging by the index level, expectations are running ahead.”
The Nikkei 225 has climbed more than 5% through Monday since US President Donald Trump announced so-called reciprocal tariffs on April 2.
Source: Bloomberg
