June 19, 2019 / 2:49 AM / 5 months ago

Nikkei surges to 4-week highs on hopes for trade talks and U.S. rate cut

* Nomura Holdings jumps on share buyback announcement

* Japan Display soars on report Apple may help

By Ayai Tomisawa

TOKYO, June 19 (Reuters) - Japan’s Nikkei surged to four-week highs on Wednesday morning on news that the United States and China will rekindle talks on trade, while ongoing expectations that the U.S. Federal Reserve will cut rates this year supported sentiment.

The Nikkei share average jumped 1.7% to 21,320.80 in midmorning trade, after rising to a high as 21,352.22 to hit the highest level since May 22.

U.S. President Donald Trump said he would meet with Chinese President Xi Jinping at the G20 summit later this month, and said talks between the two countries would restart after a recent lull.

“Investors are taking heart from the new development. The two countries will at least be talking (after a lull), so the market thinks there is little chance that talks get broken off soon after they meet,” Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute.

Hirakawa also said support for risk appetite came from hopes and expectations of monetary easing in both the United States and Europe.

The Fed started a two-day policy meeting on Tuesday that analysts expect will result in interest rates being left unchanged, while setting the stage for possible easing later this year.

On Tuesday, European Central Bank President Mario Draghi hinted at more stimulus if regional inflation fails to pick up toward its target, sending global yields lower.

The broader Topix gained 1.5% to 1,550.98, with all but one of its subsectors in positive territory.

Companies with large exposure in China such as tech shares and electric component makers outperformed, with Advantest Corp , Taiyo Yuden, TDK Corp all adding more than 4%.

Machinery shares gained ground, with Fanuc Corp rising 2.3%, Yaskawa Electric Corp adding 2.8% and Keyence Corp jumping 4%.

Nomura Holdings leapt 8.4% after it said it would buy back up to 8.6% or its shares outstanding, or up to 150 billion yen.

Elsewhere, Japan Display Inc surged 16% after the Wall Street Journal reported that Apple Inc may consider helping the company. Reuters has not verify the report. (Editing by Simon Cameron-Moore)

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