August 28, 2018 / 7:15 AM / 22 days ago

Nikkei closes at highest since June 15, but can't stay above 23,000

* Nikkei moves up early on United States-Mexico trade deal

* Trade deal helps shares of car and auto-parts makers

By Ayai Tomisawa

TOKYO, Aug 28 (Reuters) - Japan’s Nikkei breached 23,000 on Tuesday thanks to the United-States-Mexico trade deal, then shed most of the gains on profit-taking but still ended the day at its highest close since mid-June.

The Nikkei share average finished the day up 0.1 percent at 22,813.47.

The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact.

“Investors are relieved on receding trade worries but there are several other factors in the U.S. that are raising sentiment for the Japanese market,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“The U.S. economy is strong, its corporate earnings are bright while inflation is under control, so the environment is favourable for risky asset investors.”

He said one concern is that Japan’s trading volume and turnover have been thin, even though hedge funds are seen buying back Japanese stocks that they sold a few weeks ago.

“Unless trade becomes more active, the Nikkei is unlikely to rise and stay above 23,000,” Fujito said.

The broader Topix gained 0.2 percent on Tuesday to 1,731.63. Advancing issues outnumbered decline ones 1,018 to 982.

Shares in Japan’s top three automakers, which have plants in Mexico, rose. Toyota Motor Co advanced 0.9 percent, Nissan Motor Co climbed 1.3 percent and Honda Motor Co gained 1.3 percent.

Autoparts makers followed suit, with Denso Corp up 2.3 percent, Aisin Seiki gaining 1.2 percent, and Jtekt Corp rising 1.8 percent.

Investors also took heart from news that the Toyota group of companies said they would form a joint venture to develop software that manages brakes, steering and other components for automated driving. (Reporting by Ayai Tomisawa; Editing by Darren Schuettler and Richard Borsuk)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below