US Markets

Japanese stocks up sharply, China-linked shares climb on trade optimism

Credit: REUTERS/ISSEI KATO

Japanese stocks rallied on Friday on signs the United States and China might resume full-scale negotiations ahead of an approaching deadline for additional U.S. tariffs.

By Shinichi Saoshiro

TOKYO, Aug 30 (Reuters) - Japanese stocks rallied on Friday on signs the United States and China might resume full-scale negotiations ahead of an approaching deadline for additional U.S. tariffs.

Chinese commerce ministry spokesman Gao Feng told reporters on Thursday that Beijing hopes Washington can cancel the planned tariff increase to avoid an escalation in the trade war. U.S. President Donald Trump said some discussions took place on Thursday, with more talks scheduled.

The Nikkei index .N225 ended the day up 1.19% at 20,704.37, turning from a small 0.09% loss on Thursday for an overall 1.4% gain on the week.

"It should be known that both the U.S. and Japanese markets are thin and the gains are driven mostly by short-covering," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"The Chinese commerce ministry's stance on tariffs is worth noting but profit taking pressure will build along with further gains."

Shares linked to China gained on the hopeful signs for U.S.-China trade talks, which have waxed and waned over the past months and kept global markets on edge.

Hitachi Construction Machinery Co 6305.T and Komatsu Ltd 6301.T rallied 2.2% and 2%, respectively.

Robot maker Fanuc Corp 6954.T jumped 2.7% and electrical equipment manufacturer Yaskawa Electric Corp 6506.T advanced 3.8%.

Ryohin Keikaku Co 7453.T, which operates the MUJI chain of household item stores with a heavy presence in China, climbed 2.4%.

Exporters were supported as the yen weakened to a one-week low versus the dollar. Toyota Motor Corp 8035.T and Panasonic 6752.T gained 1% each and Tokyo Electron 8035.T added 1.7%.

There were 201 advancers on the Nikkei index against 24 decliners.

The broader Topix rose 1.46% to 1,511.86.

The stocks that gained the most among the top 30 core Topix names were Hitachi Ltd 6501.T, which rose 3.1%, followed by SoftBank Group Corp's 9984.T 2.9% rise.

The underperformers among the Topix 30 were Mitsubishi Estate Co 8802.T which declined 0.6% and Seven & i Holdings Co 3382.T, off 0.1%.

The volume of shares traded on the Tokyo Stock Exchange's main board was 1.21 billion, compared to the average of 1.11 billion yen in the past 30 days.

(Additional reporting by the Tokyo markets team Editing by Shri Navaratnam)

((shinichi.saoshiro@thomsonreuters.com; +813-6441-1774))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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