TOKYO, Japan (AFP) — Tokyo shares opened higher Monday, with other regional bourses following suit, as investors breathed a sigh of relief after the US and China agreed to suspend new tariffs in their escalating trade war.
Investors returned to buying after the long-awaited meeting between US President Donald Trump and Chinese President Xi Jinping on the sidelines of weekend G20 talks in Argentina.
The leaders of the world’s top two economies agreed not to impose new tariffs and to continue talking, lowering the temperature of a conflict that has spooked world markets.
The benchmark Nikkei 225 index added 1.26 percent or 282.73 points to 22,633.79 in early trade, while the broader Topix index rose 1.17 percent or 19.46 points at 1,686.91.
“The Tokyo market was expected to start with buy orders leading the way after the US-China summit finished without any turbulence,” Okasan Online Securities said in a note to clients.
“A sense of relief should encourage investors to return to buying.”
However, the brokerage noted that while the decision avoided an immediate further escalation of the trade war, “it was only a postponement and still requires caution”.
Under the US-China agreement, Trump shelved a plan to raise existing tariffs of 10 percent to 25 percent from the start of next year.
But the White House said the tariffs would still leap up to 25 percent if China does not meet US demands in 90 days.
Other regional markets also cheered the move.
Sydney jumped 1.6 percent, Seoul and Taipei each climbed 1.7 percent, and Wellington added 0.7 percent.
In the forex market, the US dollar firmed to 113.70 yen from 113.54 yen in New York Friday.
Investors are now looking to the upcoming OPEC meeting as crude prices slump on global markets, Mizuho Securities said in a note.
Among notable gainers in Tokyo on Monday were China-related shares like industrial robot maker Fanuc, which jumped 2.45 percent to 19,865 yen in early trade.
Toyota soared 3.48 percent to 7,040 yen and SoftBank added 1.61 percent to 9,679 yen.
Uniqlo-operator Fast Retailing opened higher, but dropped 0.42 percent to 58,790 yen.
© Agence France-Presse
