TOKYO, Japan (AFP) — Tokyo’s benchmark Nikkei stock index jumped more than 2.5 percent Friday, boosted by hopes for a US-China trade deal, and a big election win for Britain’s ruling Conservative Party that paves the way for Brexit.
The Nikkei 225 index rallied 2.55 percent, or 598.29 points, to close at 24,023.10, the highest since early October last year. Over the week, it gained 2.9 percent.
The broader Topix index was up 1.59 percent, or 27.15 points, at 1,739.98, and rose 1.6 percent from a week earlier.
“The market is reacting to the twin positive news, the reported US-China deal on trade, and the UK vote,” both of them reducing uncertainty, Kyoko Amemiya, senior market analyst at SBI Securities, told AFP.
Wall Street rallied on Thursday after media reports indicated President Donald Trump would call off steep tariffs planned for Sunday and slash duties already in place on Chinese goods.
“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” Trump tweeted early in the day, giving stocks a lift.
Britain’s Prime Minister Boris Johnson on Friday looked set to win a parliamentary majority, after a snap election called in a bid to resolve the deadlock over Brexit.
Sterling was holding steady in Asian afternoon trade, buying $1.3475 against $1.3470 in New York Thursday afternoon.
“Boris’ gamble that getting Brexit done mattered most to the British public has proven correct,” said Craig Erlam, senior market analyst at Oanda.
“The pound had rallied a little into the result over the last week or so and for once, optimistic sterling traders were not burned,” he said in a note.
“While Boris’ deal may be viewed by many as a hard form of Brexit, this offers the certainty that hasn’t existed for too long,” he said, while predicting the volatility in sterling would continue.
The dollar also rose against the yen, trading at 109.55 yen compared with 109.30 yen in New York, giving further relief to investors in Tokyo.
Exporters gained ground. Panasonic jumped 2.07 percent to 1,058 yen and Toyota surged 2.39 percent to 7,811 yen with TDK soaring 4.19 percent at 12,680 yen.
Major banks also went up, with Mitsubishi UFJ Financial gaining 2.68 percent to 595.7 yen and Mizuho Financial up 2.03 percent at 170.7 yen.
Investors barely reacted to a business sentiment survey by the central Bank of Japan that showed confidence among the biggest manufacturers has slipped for the fourth straight quarter amid lingering worries over the US-China trade war.
© Agence France-Presse
