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Nikkei hits 4-1/2-month high on Japan-US trade optimism, upbeat China data

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TOKYO: Japan’s Nikkei advanced to a 4-1/2-month high on Wednesday as automakers rallied on hopes of progress in Japan-US trade talks, while companies with large exposure to China gained on upbeat Chinese economic data.

The Nikkei share average ended up 0.3 per cent at 22,277.97, its highest closing level since early December.

Economy Minister Toshimitsu Motegi said on Tuesday that no deal had been reached on individual trade issues after two days of talks with US Trade Representative Robert Lighthizer, but Motegi hoped for a good result “at an early stage.”

The news lifted shares of automakers facing the threat of higher US tariffs on Japanese auto exports, traders said.

Toyota Motor Corp rose 2.0 per cent, Honda Motor Co added 1.0 per cent and Mazda Motor Corp soared 2.5 per cent.

“There was a possibility that the issue would be brought to the table, so the market seems to be relieved,” said Ryohei Yoshida, senior technical analyst at Daiwa Securities.

Strong economic data in China added to the positive sentiment on Japanese stocks.

China’s economy grew 6.4 per cent in the first quarter from a year earlier, data showed on Wednesday, defying expectations for a further slowdown.

Industrial output also grew 8.5 per cent in March from a year earlier, the fastest pace since July 2014, as factories ramped up production in anticipation of more business amid government measures to support the economy.

The data sparked gains in construction-related firms with exposure to China.

Construction equipment makers Komatsu Ltd jumped 1.9 per cent and Hitachi Construction Machinery advanced 1.3 per cent, while industrial machinery maker Yaskawa Electric soared 3.3 per cent.

Declining stocks included index-heavyweight SoftBank Group Corp, down 1.5 per cent on news that the US Justice Department has concerns about the structure of a proposed $26 billion merger of T-Mobile US Inc and SoftBank’s Sprint Corp.

SoftBank, which has a big impact on the Nikkei benchmark index, took 20 points off the index.

Elsewhere, Omron Corp rallied 4.3 per cent after Nidec Corp said it would buy Omron’s automotive electronics unit for about 100 billion yen.

The broader Topix rose 0.3 per cent to 1,630.68.

Source: Economic Times