Tokyo, Dec 13 (AFP/APP): Tokyo’s key Nikkei stock index jumped more than two percent Friday, boosted by hopes for an imminent US-China trade deal and polls predicting an election win for Britain’s ruling Conservative Party, setting the stage for Brexit.
The Nikkei 225 index rallied 2.18 percent or 510.91 points to 23,935.72 in early trade while the broader Topix index was up 1.63 percent or 28.00 points at 1,740.83.
“The market is reacting to the twin positive news, the reported US-China deal on trade, and the UK vote,” both of them reducing uncertainty, Kyoko Amemiya, senior market analyst at SBI Securities, told AFP.
Wall Street rallied on Thursday after media reports indicated President Donald Trump would call off steep tariffs planned for Sunday and slash duties already in place on Chinese goods.
“Getting VERY close to a BIG DEAL with China. They want it, and so do we!” Trump tweeted early in the day, giving stocks a lift.
British exit polls also showed Prime Minister Boris Johnson’s Conservative Party was on course to score a large parliamentary victory, pushing the pound up about two percent against the dollar.
Sterling was holding steady in early Friday Asian trade, buying $1.3456 against $1.3470 in New York Thursday afternoon.
“Boris’ gamble that getting Brexit done mattered most to the British public has proven correct,” said Craig Erlam, senior market analyst at Oanda.
“The pound had rallied a little into the result over the last week or so and for once, optimistic sterling traders were not burned,” he said in a note.
“While Boris’ deal may be viewed by many as a hard form of Brexit, this offers the certainty that hasn’t existed for too long,” he said, while predicting the volatility in sterling would continue.
The dollar also rose against the yen, trading at 109.47 yen compared with 109.30 yen in New York, giving further relief to investors in Tokyo.
Exporters gained ground. Panasonic jumped 2.17 percent to 1,059 yen and Toyota rose 2.01 percent to 7,782 yen.
Major banks also went up, with Mitsubishi UFJ Financial gaining 1.84 percent to 590.8 yen.
Investors barely reacted to a business sentiment survey by the central Bank of Japan that showed confidence among the biggest manufacturers has slipped for the fourth straight quarter amid lingering worries over the US-China trade war.