REFILE-Japan stocks edge up to 13-mth high on U.S.-China trade hopes, weaker yen

  • Reuters
  • Stock Market News
REFILE-Japan stocks edge up to 13-mth high on U.S.-China trade hopes, weaker yen
Credit: © Reuters.

(Corrects to fix typo in para 7 to UFJ, not UGJ)

By Tomo Uetake

TOKYO, Nov 6 (Reuters) - Japan's benchmark Nikkei share average inched up to a fresh 13-month high on Wednesday as hopes for a U.S.-China trade deal, a weaker yen and rising bond yields buoyed exporters and financials.

The Nikkei average .N225 ended up 0.1% at 23,303.82 points, its highest close since Oct. 10 last year.

The broader Topix .TOPX ended marginally higher at 1,694.45, its strongest close in more than a year, after giving up earlier gains as profit taking kicked in.

Overnight, the U.S. 10-year Treasury yield US10YT=RR climbed as high as its six-week peak of 1.873% and Germany's 20-year yield rose into positive territory for the first time in 3-1/2 months on optimism that the United States and China will scale back a bruising trade war. Wednesday, the dollar held the upper hand against its rivals, particularly versus safe-haven yen, with the pair last trading at 109.06 yen JPY= , not far from its October high, providing a boost for Japanese exporters as a weak yen enhances corporate profits when they are repatriated. Hitachi 6501.T advanced 2.1%, Mitsubishi Motor 7211.T rose 1.5% and Kyocera 6971.T gained 1.4%.

The interest rate-sensitive financial sector also outperformed, with T&D Holdings 8705.T jumping 4.2%, Dai-ichi Life Holdings 8750.T and Mitsubishi UFJ Financial Group 8306.T also adding 1.7% and 0.9%, respectively.

"Hot money players, such as commodity trading advisors (CTA) and some macro hedge funds, have been building long positions in U.S. and Japanese stocks," said Masanari Takada, cross-asset strategist at Nomura Securities.

"Those players seem to be betting on further upside ahead of a potential trade agreement between the United States and China."

Mid-year earnings season continued in full gear in Japan.

Suzuki Motor 7269.T shed 3.6% after the automaker's quarterly profit plunged by almost a third on slumping car demand in India, its biggest market. It also slashed its full-year vehicle sales outlook. Group Holdings 2502.T dived 6.1% after the brewer lowered its forecast for full-year operating profit and year-end dividend, citing unfavourable weather and currency moves. Railway 9142.T soared 3.7% after it announced its first ever share buyback of up to 10 billion yen, after receiving proposals from New York-based investment firm, Fir Tree Partners.

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