April 5, 2019 / 2:33 AM / 2 months ago

Nikkei touches a 1-month high; firms relying on China sales rise

* Nikkei has gained 2.7 pct so far this week

* Yaskawa, Fanuc rise on hopes for U.S.-China trade deal

* Foreigners net sellers of Japanese stocks March 25-29 - TSE

By Ayai Tomisawa

TOKYO, April 5 (Reuters) - Japan's Nikkei edged up on Friday morning to a fresh one-month high as hopes that a U.S.-China trade deal will be made supported risk appetites, lifting shares of firms that rely on Chinese demand.

The Nikkei share average rose 0.3 percent to 21,787.48 in midmorning trade, after reaching 21,839.18, the highest since March 4. For the week, the benchmark index was up 2.7 percent.

China's Xinhua news agency, quoting Vice Premier Liu He, reported that President Xi Jinping said progress was being made and called for an early conclusion of negotiations.

U.S. President Donald Trump said on Thursday that trade talks with China were going well and he would only accept a "great" deal as negotiators hammered out differences ahead of a meeting between Trump and China's vice premier on Thursday.

Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute, said investors "have already taken heart from signs of progress in the talks, and if a deal comes out, it could be another booster for the stock market," said

Investors are also waiting on the U.S. March payrolls report which is forecast to bounce back by 180,000 in March, following February's distorted 20,000 rise.

Data from the U.S. Labor Department showed that jobless claims fell to a 49-year low last week, pointing to sustained labour market strength.

Friday's winners were firms that depend on Chinese demand. Yaskawa Electric surged 2.6 percent, Hitachi Construction Machinery advanced 1.8 percent and Fanuc Corp added 1.5 percent.

Japan Post Insurance soared 5.9 percent after saying after Thursday's market close that it would buy back up to 50 million shares for as much as 100 billion yen ($895.4 million).

Also late on Thursday, its holding company Japan Post Holdings said that it will sell nearly a third of its stake in the company in an offering that could fetch around $3.7 billion, as a step aimed at advancing the privatisation of the Japan Post group.

Foreigners were net sellers of Japanese stocks for the second consecutive week ended March 29 as a fall in U.S. bond yields stoked fears of a recession in the U.S.

Overseas investors sold a net 857.5 billion yen of Japanese stocks, including cash equities and futures in that week, marking their biggest weekly net sales since Oct. 26, 2018, data from Japanese stock exchanges showed.

The broader Topix rose 0.4 percent to 1,625.70. ($1 = 111.6800 yen) (Editing by Richard Borsuk)

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