Nikkei jumps to 13-month high as U.S.-China trade hopes brighten mood

By Tomo Uetake
TOKYO, Nov 5 (Reuters) - Japan's benchmark Nikkei share
average leaped to 13-month highs on Tuesday after a long
weekend, as U.S. and Chinese trade negotiators moved closer to
sealing a preliminary deal and upbeat Wall Street stocks lifted
investor sentiment.
Broad-based buying sparked a 1.8% rally in the Nikkei
average .N225 to 23,251.99, its highest close since Oct. 10 of
last year. The broader Topix .TOPX advanced 1.7% to 1,694.16,
its best finish in more than a year.
On Monday, all three major stock indexes on Wall Street
finished at record highs on increasing signs the United States
and China are inching closer to a truce in their trade war and
on optimism solid consumer-driven growth will underpin the U.S.
economy. .N/C
U.S. S&P 500 futures ESc1 gained as much as 0.3% in Asian
trade on Tuesday after the Financial Times reported that the
United States is considering dropping some tariffs on China.
They were last up 0.2%.
China is pushing U.S. President Donald Trump to remove more
tariffs imposed in September as part of a "phase one" U.S.-China
trade deal, expected to be signed later this month, people
familiar with the negotiations said on Monday. The report came after Beijing and Washington spoke of
progress in trade talks on Friday and U.S. Commerce Secretary
Wilbur Ross said licenses for U.S. companies to sell components
to China's Huawei Technologies will come "very shortly".
"Political uncertainties are receding. That means those who
had held off their activities, both in the real economy and
financial markets, are getting active," said Masaru Ishibashi,
joint general manager of trading at Sumitomo Mitsui Bank.
On the data front, U.S. non-farm payrolls released on Friday
slowed less than expected in October as the drag from a strike
at General Motors GM.N was offset by gains elsewhere, offering
some assurance that consumers would continue to support the
slowing economy. In Tokyo, China- and semiconductor-related companies led the
gains on Tuesday.
Construction machinery makers Komatsu 6301.T and Hitachi
Construction 6305.T climbed 5.4% and 5.1%, respectively, while
Kobe Steel 55406.T added 2.8%.
Chip-related SUMCO 3436.T advanced 3.1%, while Rohm
6963.T and Renesas Electronics 6723.T surged 5.1% and 7.0%,
respectively.
The Nikkei's heavyweight SoftBank Group 9984.T rallied
2.4% to become the second-most traded stock on the Tokyo's main
board.
The investment conglomerate said on Friday it would book a
277 billion yen ($2.5 billion) gain in the second quarter after
portfolio company Alibaba Group Holding BABA.N recorded a $9.7
billion gain related to its stake in Ant Financial. Z Holdings 4689.T , formerly known as Yahoo Japan Corp,
soared 16.4% after the e-commerce firm's operating profit rose
by 11.2% year-on-year in the July-September quarter.
Elsewhere, Fujifilm Holdings 4901.T climbed 6.7% after the
Wall Street Journal reported that Xerox XRX.N has agreed to
sell its 25% stake in the joint venture, Fuji Xerox, to Fujifilm
for $2.2 billion, citing sources. The two companies
announced the ending of the 57 year-old joint venture after the
market close. = 108.6600 yen)