Tokyo stocks open up after US-EU trade announcement

Tokyo, Japan | AFP | Thursday – Tokyo stocks opened up Thursday on investor relief after US President Donald Trump and European Commission chief Jean-Claude Juncker reached an agreement to defuse a festering trade dispute.

The benchmark Nikkei 225 index was up 0.02 percent or 4.15 points at 22,618.40 in early trade, while the broader Topix index rose 0.68 percent or 11.87 points to 1,765.35.

But the Nikkei soon fell into negative territory amid speculation that the Bank of Japan could review its buying of exchange-traded funds to invest in listed companies.

"The Nikkei is slack due to caution over the Bank of Japan meeting (next week) but overall sentiment is solid," said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.

Media reports have said the central bank would discuss tweaking its loose monetary policy at the meeting.

Caution sparked selling for high-priced shares, dragging the Nikkei down, but the US-EU announcement lifted the overall market.

Wall Street staged a late rally after Trump and Juncker on Wednesday agreed a plan to defuse a festering trade dispute.

"The announcement indicates their trade friction will not escalate and they would avert a trade war," Sengoku told AFP.

The improved sentiment helped push up Japanese carmakers’ stocks, Sengoku added.

Toyota climbed 1.33 percent to 7,421 yen and Nissan rose 0.48 percent to 1,040 yen.

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The dollar was trading at 110.86 yen gainst 110.98 yen in New York Wednesday afternoon.

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