Japan’s Nikkei Jumps as US-China Trade Talks Show Progress
Japan’s Nikkei Soars on Optimism for US-China Trade Deal
TOKYO – Japan’s Nikkei stock average surged on Monday, fueled by growing optimism that US-China trade talks are nearing a resolution.
As of 0202 GMT, the Nikkei was up 0.2% at 37,573.27, while the broader Topix edged 0.02% higher at 2,734.09.
Market Analysts Cite Trade Talks as Driving Force
Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory, attributed the rise to investor confidence that the trade negotiations between the US and China were making positive strides.
“Investors bought stocks on optimism that the trade talks between the U.S. and China made progress,” Yasuda explained. “But gains were limited as they sold stocks on the rally. Both the Nikkei and Topix rose sharply, but those rallies were based just on expectations on the trade talk progress.”
Nikkei’s Strong Performance Amidst Recent Volatility
The Nikkei has rebounded significantly from its lows in early April, gaining about 20% since April 7th. This surge follows a period of volatility triggered by the announcement of sweeping US tariffs.
However, Maki Sawada, senior strategist at Nomura Securities, cautioned that the market might be overheating. The Nikkei traded more than 7% above its 25-day average on Friday, a sign that investor enthusiasm could be exceeding rational valuations.
US-China Trade Talks End on Positive Note
On Sunday, US-China trade talks concluded on a cautiously optimistic note. US officials highlighted a “deal” aimed at reducing the US trade deficit, while Chinese officials emphasized “important consensus” reached and the launch of a new economic dialogue forum.
Sectoral Moves Reflect Trade Hopes and Concerns
The positive sentiment surrounding the trade talks fueled gains in certain sectors. Advantest, a chip-testing equipment maker, jumped 4.3%, contributing significantly to the Nikkei’s rise. Tokyu Fudosan, a property developer, also surged 5.18% after forecasting record profits.
However, concerns about declining drug prices following US President Donald Trump’s announcement of an executive order to address pharmaceutical costs weighed on the drug sector. Daiichi Sankyo, a major Japanese pharmaceutical company, lost 5.44%, and the entire sector fell 4.3%, becoming the worst performer among Tokyo Stock Exchange’s industry sub-indexes.
Nippon Steel also declined 4.94% after projecting a 43% drop in net profit for the fiscal year ending March 2026.
