INSUBCONTINENT EXCLUSIVE:
Japanese shares posted their biggest one-day gain in more than a year on Thursday as investor sentiment was buoyed after China cut tariffs
on some imported goods from the United States, lifting some of the gloom from a fast-spreading virus outbreak.
The benchmark Nikkei average
jumped 2.4 per cent, its most since late December 2018, to a two-week closing high of 23,873.59.
The broader Topix advanced 2.1 per cent to
1,736.98, also marking its best day in 13 months
Turnover on the main board hit 3.05 trillion yen ($27.7 billion), the highest since Dec
13.
"Although buying in index futures was the main driver of today's market, more than 3 trillion yen worth of turnover (in cash equities)
implies some real buying was also happening," said Takeo Kamai, head of executions services at CLSA in Tokyo.
"The key here is whether we
can clear the iron ceilings -- 24,000 in the Nikkei and 110 yen in the dollar/yen
If we break above those levels, we are likely to see more full-fledged buying from investors."
All of the 33 sector subindexes on the Tokyo
Stock Exchange were in positive territory, led by cyclical sectors
Insurance , oil and coal products and precision machinery were the top three performing subindexes.
Stocks extended earlier gains after
China said it will halve tariffs on some US goods from Feb
14, corresponding with US pledges to cut levies on some Chinese goods after the two sides reached a partial trade deal early last month.
The
announcement was seen by analysts as a move by Beijing to boost confidence amid the coronavirus outbreak that has disrupted much of its
economy and is increasingly rippling through global supply chains.
"Under the phase 1 deal, China has to meet a tough target to increase US
imports by $100 billion this year, so a measure like this was necessary and expected," said Tomo-o Kinoshita, global market strategist at
Invesco Asset Management.
"But at the same time, that they did this now points to their desire to support Chinese companies as the
coronavirus epidemic will obviously deal a huge blow to China's growth."
China said it hopes to work with the United States to eliminate
all tariff increases in future.
Overnight, the S-P 500 climbed 1.1 per cent to a record close and the Nasdaq Composite added 0.4 per cent to
an all-time peak, while the Dow advanced 1.7 per cent, following an upbeat ADP private sector jobs report and ISM's non-manufacturing
index.
The greenback hit a two-week high of 109.985 yen, providing a tailwind for Japanese exporters, as a weaker local currency boosts
corporate profits when they are repatriated.
With the earnings season in full swing in Japan, Toyota Motor Corp rose 2.6 per cent after the
country's biggest automaker raised its forecast for annual operating profit by 4.2 per cent, citing favourable currency rates and
better-than-expected vehicle sales.
Pan Pacific International Holdings Corp soared 17.7 per cent after the discounter Don Quijote's parent
raised its operating profit forecast for the year ending June.
Z Holdings Corp surged 6.0 per cent after the internet services firm reported
a net profit of 75.1 billion yen for the April-December period, up 7 per cent from a year earlier, due to its consolidated subsidiary of
ZoZo.
Bucking the overall firmness, DeNA Co Ltd dived 9.7 per cent after the mobile partner of Nintendo booked a 49.4 billion yen writedown
as its gaming business falters in Japan's saturated mobile market.
Although the financial markets found some comfort, traders admitted
concerns about the coronavirus outbreak and its broader impact on individual companies and the economy.
The death toll in mainland China
jumped by 73 to 563 as experts intensified efforts to find a vaccine for the disease that has shut down Chinese cities and forced thousands
more into quarantine around the world.
Drugmakers and the World Health Organization played down reports about progress towards finding
treatments, which had boosted traders' confidence.