By Stanley White
TOKYO, Nov 25 (Reuters) - Japanese stocks rose by the most in two weeks on Monday as investors turned more confident the United States and China could reach an agreement to de-escalate their trade war.
The Nikkei index ended Monday up 0.78% at 23,292.81 points, the biggest increase since Nov. 12, as exporters in the IT sector and the industrial equipment sector led the advance, because they benefit from an increase in overseas demand.
The latest wave of optimism came after U.S. President Donald Trump said on Friday a trade deal with China is "potentially very close." Chinese President Xi Jinping also reiterated his desire on Friday for a preliminary trade deal. confidence was reinforced on Monday when China's Global Times said both countries were "very close" to a phase one trade deal and that China was willing to negotiate for a phase two or even a phase three trade deal. traders remain sceptical amid conflicting signals from both sides, which have caused markets to swing between gains and losses.
"There have been some comments suggesting progress in resolving the U.S.-China dispute, but there are still a lot of risks posed by things like the situation in Hong Kong," said Shusuke Yamada, head of FX and Japan equity strategy at Merrill Lynch Japan Securities in Tokyo.
"Hope hasn't completely collapsed, but we need to closely watch how this plays out."
There were 191 advancers on the Nikkei index against 29 decliners on Monday.
The largest percentage gainers in the index were steel maker JFE Holdings Inc 5411.T , which rose 4.19%, followed by Hitachi Construction Machinery Co Ltd 6305.T and Pacific Metals Co Ltd 5541.T , which climbed 4.18% and 4.16%, respectively.
The biggest index losers were electronics maker Panasonic Corp 6752.T , which fell 2.29%, followed by telecoms facilities builder Comsys Holdings Corp 1721.T and Hino Motors Ltd 7205.T , which fell 2.14% and 1.94%, respectively.
Washington and Beijing have imposed tariffs on each other's goods in a 16-month long dispute over Chinese trade practices that the U.S. government says are unfair.
The tariffs have slowed trade flows and economic growth, making them the biggest risks to the global economy.
If the two sides can agree to roll back even some of these tariffs, that could spark a global rally in equities and other risk assets.
The Topix index .TOPX rose 0.69% on Monday to 1,702.96.
The volume of shares traded on the Tokyo Stock Exchange's main board .TOPX was 0.89 billion, compared to the average of 1.27 billion yen in the past 30 days. (Editing by Sam Holmes)
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.