Tokyo stocks rally after US-China G20 trade truce | Fin24
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Tokyo stocks rally after US-China G20 trade truce

Dec 03 2018 08:10

Tokyo - Tokyo shares opened higher on Monday, with other regional bourses following suit, as investors breathed a sigh of relief after the US and China agreed to suspend new tariffs in their escalating trade war.

Investors returned to buying after the long-awaited meeting between US President Donald Trump and Chinese President Xi Jinping on the sidelines of weekend G20 talks in Argentina.

The leaders of the world's top two economies agreed not to impose new tariffs and to continue talking, lowering the temperature of a conflict that has spooked world markets.

The benchmark Nikkei 225 index added 1.26% or 282.73 points to 22 633.79 in early trade, while the broader Topix index rose 1.17% or 19.46 points at 1 686.91.

"The Tokyo market was expected to start with buy orders leading the way after the US-China summit finished without any turbulence," Okasan Online Securities said in a note to clients.

"A sense of relief should encourage investors to return to buying."

However, the brokerage noted that while the decision avoided an immediate further escalation of the trade war, "it was only a postponement and still requires caution".

Under the US-China agreement, Trump shelved a plan to raise existing tariffs of 10% to 25% from the start of next year.

But the White House said the tariffs would still leap up to 25% if China does not meet US demands in 90 days.

Other regional markets also cheered the move.

Sydney jumped 1.6%, Seoul and Taipei each climbed 1.7%, and Wellington added 0.7%.

In the forex market, the US dollar firmed to ¥113.70 from ¥113.54 in New York on Friday.

Investors are now looking to the upcoming OPEC meeting as crude prices slump on global markets, Mizuho Securities said in a note.

Among notable gainers in Tokyo on Monday were China-related shares like industrial robot maker Fanuc, which jumped 2.45% to ¥19 865 in early trade.

Toyota soared 3.48% to ¥7 040 and SoftBank added 1.61% to ¥9 679.

Uniqlo-operator Fast Retailing opened higher, but dropped 0.42% to ¥58 790.

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