Tokyo shares end up on US-China trade hopes

Tokyo: Tokyo stocks shed earlier losses to end the Thursday session marginally higher, thanks to rekindled hopes for progress in the US-China trade talks.

The benchmark Nikkei 225 index added 0.15 percent or 32.74 points to 21,464.23, while the broader Topix index was fractionally up by 0.03 points at 1,613.50.

Tokyo shares dove underwater in the morning, weighed down by profit-taking after recent gains.

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But investors perked up in the afternoon after reports that the US and China are drafting several documents aimed at settling the most contentious subjects in their trade war.

“Investors saw the reports related to the US-China trade talks. The market then began to rise on hopes for progress,” said Okasan Online Securities in a note to clients.

Top US and Chinese negotiators are convening again Thursday in search of a solution to their trade dispute, as a March 1 deadline for US tariffs draws near.

US President Donald Trump has repeatedly claimed the talks with Beijing are going “very well,” but concrete signs of progress have not been apparent in the three months since the two sides agreed to pause their trade war.

Trump has suggested that the deadline might be extended, calling it “not a magical date.”

However, the absence of details about the trade talks should worry investors, said Jeffrey Halley, senior market analyst at OANDA.

“There’s a lot of good news baked into equity prices regarding the trade talks. Stocks will be vulnerable to headlines and traders should stay nimble,” he wrote in a note.

“A suboptimal outcome could make for a potentially ugly correction in equities and currencies in particular.”

The Fed minutes released Wednesday lent colour to the central bank’s decision of January 30 to keep interest rates steady, and confirmed a cautious stance towards further tightening made clear by Fed Chairman Jerome Powell.

“It’s good for global markets that the US interest rates will be stable at low levels,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Centre.

But it has also a negative side for Japan, he noted.

“The minutes also mean you cannot expect the dollar to strengthen much against the yen,” a negative for Japanese exports, Sengoku told AFP.

The dollar edged down to 110.75 yen from 110.89 yen in New York Wednesday afternoon.

Automakers were broadly lower with Toyota down 0.87 percent at 6,731 yen.

But Honda, which announced the shutdown of its UK plant this week, gained 2.31 percent to 3,103 yen.

Sony emerged out of the red and ended 1.25 percent higher at 5,340. Uniqlo-operator Fast Retailing added 1.49 percent to 51,090.

Internet investor SoftBank Group fell 1.63 percent to 10,230.


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