Japan¡¯s Topix advanced for a 12th consecutive session, its longest winning streak since 2017, after upbeat comments from U.S. and Chinese trade negotiators fanned optimism for lower tariffs.
The Topix, a broad gauge of about 1,700 stocks, closed 0.3% higher at 2742.08, led by cyclical shares such as semiconductors, brokerages and shippers. The Nikkei 225 Stock Average ticked up 0.4% to 37,644.26.
¡°Markets are vaguely hoping that the U.S. will likely lower ¡®reciprocal¡¯ tariff to the base level within the next few months.¡± said Kensuke Togashi, chief strategist at Daiwa Asset Management.
The U.S. and China both said there was ¡°substantial progress¡± after talks in Switzerland aimed at de-escalating a trade war, with the two sides saying later Monday that they had agreed to a deal to slash reciprocal tariffs.
This has raised hopes of a U.S.-Japan trade deal, but investors remained cautious, as bilateral trade talks since last month have made little progress. Prime Minister Shigeru Ishiba reportedly intends to reach a trade agreement with the U.S. in July, around the time of an Upper House election.
¡°Although the news about the U.S.-China trade talk was positive, I think it is becoming difficult to chase further upside after a long rally and as the Topix is turning almost flat on the year,¡± said Yuya Fukue, trader at Rheos Capital Works.
Bucking the trend, the Topix Pharmaceutical index lost 6.5%, the biggest drop in nine months, after Trump said he plans to order a cut in U.S. prescription drug costs by mandating that Americans pay no more than people in countries that have the lowest price. Chugai Pharmaceutical, the country¡¯s biggest drugmaker by market capitalization, slid 11% while Daiichi Sankyo sank 8.2%.
The market will be looking to U.S. CPI data for April due on Tuesday, seen as a crucial piece of data on how tariffs are impacting inflation.
Investors are also watching closely earnings results and outlook from Japanese companies, with firms including SoftBank Group, Nissan Motor and Sony Group scheduled to report this week.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.