Nikkei ends at 2.5-month high as US-China trade conflict eases
TOKYO (Kyodo) -- The Nikkei stock index climbed for the fourth straight day to end at a 2.5-month high above 38,000 on Tuesday, as caution over the U.S.-China trade conflict eased after the countries agreed to lower their new tariffs significantly.
The 225-issue Nikkei Stock Average ended up 539.00 points, or 1.43 percent, from Monday at 38,183.26, its highest level since Feb. 27. The broader Topix index finished 30.06 points, or 1.10 percent, higher at 2,772.14.
On the top-tier Prime Market, gainers were led by marine transportation, pharmaceutical, and warehousing and harbor transportation service issues.
The U.S. dollar mostly remained strong around the 148 yen line in Tokyo, after hitting a one-month high of 148.65 yen in New York overnight, as receding concerns over the U.S.-China trade conflict continued to support dollar buying.
The yield on the benchmark 10-year Japanese government bond hit a one-month high of 1.465 percent as the debt was sold following a rise in U.S. Treasury yields, reflecting weakening demand for an asset class considered safer than stocks.
Shares jumped following an overnight Wall Street surge after Washington and Beijing announced Monday that they would cut their hefty tariff rates on each other by 115 percentage points and suspend part of their so-called reciprocal duties for 90 days.
"The market reacted positively to the larger-than-expected cuts of their tariffs," as they likely prioritized avoiding immediate impact on the economy and market, said Maki Sawada, a strategist at the Investment Content Department of Nomura Securities Co.
The market was supported by export-oriented auto and electronics issues that drew buying on a weaker yen, which increases exporters' overseas profits when repatriated.
The Nikkei benchmark surged over 2 percent in early trading but later trimmed some gains, as some investors took profits amid unclear prospects of trade negotiations between the United States and other countries and the impact of tariffs on corporate earnings, Sawada said.
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