TOKYO: Japan’s Nikkei share average hit a more than one-month high on Friday, as risk appetite was lifted by hopes of progress in US trade talks and domestic firms’ better-than-expected outlook.
The Nikkei rose 1.49% to 37,478.58 by the midday break, its highest level since March 27, and is set to post a 1.76% weekly gain.
The broader Topix rose 1.46% to 2,738, and was set for an 11-session rally – its longest since October 2017.
“Investors see that the market slump in April was the worst, and the environment not just for equities but for bonds is only getting better as more compromises on trade talks could be possible,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
US President Donald Trump and British Prime Minister Keir Starmer on Thursday announced a limited bilateral trade agreement that leaves in place Trump’s 10% tariffs on British exports.
Financial markets are now awaiting the outcome of preliminary US-China trade talks due to begin on Saturday in Switzerland.
Trump said on Thursday he expects there to be substantive negotiations between the two countries, and predicted that punitive US tariffs on Beijing of 145% would likely come down.
“The market was also relieved that the outlook of Japanese firms, including Toyota, is not severely affected by the US tariffs,” said Ueno.
Investors were once pessimistic about the corporate outlook amid uncertainties about the impact of US tariffs.
Japan’s Nikkei rises; NTT Data set to surge on takeover report
Among individual stocks, NTT Data surged 14% after NTT said it would take the subsidiary private by purchasing the shares it does not already own at 4,000 yen per share.
Ajinomoto rose 6.24% after the food and healthcare company announced a 100-billion-yen ($686.2 million) share buyback.
On the other hand, air-conditioning maker Daikin Industries fell 5.03% to become the worst percentage loser on the Nikkei, and also weighed on the Nikkei the most.
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