Nikkei inches up to fresh 2-month high on U.S.-China trade optimism
By Hideyuki Sano and Tomo Uetake
TOKYO, Feb 19 (Reuters) - Japanese shares edged up to new
two-month peaks on Tuesday, supported by hopes of a breakthrough
in U.S.-China trade talks, with investors snatching up defensive
shares amid lingering worries about the global economic
While markets were without firm directional cues as U.S.
markets shut on Monday for a public holiday, sentiment remained
broadly positive with investors looking for more clues from
trade negotiations between Washington and Beijing.
A new round of talks between the United States and China to
resolve their trade war will take place in Washington on
Tuesday, with follow-up sessions at a higher level later in the
week, the White House said on Monday.
Japan's Nikkei share average added as much as 0.2
percent to 21,326.11, its highest since mid-December, then ended
the morning session, up 0.1 percent on the day.
"It is still difficult to buy foreign demand-led sectors.
But I think domestic demand-led firms will do well because the
government is likely to take lots of steps to support the
economy to counter the planned hikes in consumption tax," said
Tsuyoshi Shimizu, head of research at Asset Management One.
"Earnings expectations have fallen a bit too much. It seems
like markets expect Japanese corporate earnings to fall about
five percent in the next financial year, but I do think they can
grow by almost 10 percent," he added.
Defensive shares gained with East Japan Railway and
Central Japan Railway rising 1.5 percent and 1.4
Many exporters were softer as investors remain wary that
slowdowns in China and elsewhere could hurt their top line.
Robot maker Fanuc fell 0.7 percent and Panasonic
dropped 0.8 percent. Shin-etsu Chemical shed
The latest Reuters monthly tankan, which showed corporate
sentiment in February slipped to the lowest levels since late
2016, also weighed on investor sentiment.
The monthly poll found manufacturers' mood sliding for a
fourth straight month and service-sector morale falling for the
first time in four months, in a sign companies took a hit from
weakening demand both at home and abroad amid slowing global
growth and trade frictions.
Other notable movers included Softbank Group, which
fell 3.5 percent after the Wall Street Journal reported that
its key investors, including Saudi Arabia's sovereign wealth
fund, were unhappy with the high valuation of its flagship
The broader Topix edged up 0.2 percent to 1,604.54,
which was also the highest in two months.
(Editing by Jacqueline Wong)
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