Nikkei hits 40,000 level as trade hopes drive Japan stock rally
Japanese shares rose for a fourth day on trade optimism after the United States and China signed a deal and the White House hinted U.S. President Donald Trump may soften his July tariff deadline.
The broader Topix Index rose 1.1% to 2,836.30 as of 11 a.m. on Friday in Tokyo, its highest intraday level since July. The blue-chip 225-issue Nikkei average climbed 1.5% to 40,171.01 — the first time it has exceeded 40,000 since January.
Exporters such as carmakers were among the biggest contributors to gains, with Toyota, Honda and Nissan all rising more than 2.5% at one point. Chip names like Tokyo Electron were also strong.
"There are signs of progress on the trade front, and some investors are expecting an extension of the deadline for reciprocal tariffs,' said Yutaka Miura, a senior technical analyst at Mizuho Securities.
The White House press secretary said on Thursday that Trump's July 9 trade deal deadline is "not critical.'
"This is all positive for stocks, and drove U.S. shares higher Thursday, prompting buying across the Topix and Nikkei indexes,' Miura said. The Nikkei's rise beyond the 40,000 level is further boosting sentiment, with large-cap names like autos among the main beneficiaries, he added.
Heightened expectations of a U.S. rate cut are also fueling upward momentum, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.
The upbeat sentiment is palpable in markets across the region, with the MSCI's Asia index climbing to a four-year high.
"The Middle East conflict has calmed, trade deals appear to be getting done and we have increased optimism of Fed rate cuts,' said Nick Twidale, chief analyst at AT Global Markets. "That's pushing through to global markets.'
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