Japan’s Topix hits record high in trade deal afterglow

[TOKYO] Japan’s Topix iindex rose to a record high on Thursday and the Nikkei share average hit a new one-year peak, as stocks rallied for a second straight session after Tokyo struck a long-awaited trade deal with Washington.

The Topix advanced as much as 1.4 per cent to reach 2,968.48 for the first time ever.

The Nikkei gained as much as 1.4 per cent to 41,740.71, its highest level since July of last year.

Banks led the gains, with the Topix banking index jumping 3.6 per cent, buoyed by bets that the additional economic clarity offered by the tariff deal will allow the Bank of Japan to resume interest rate hikes later this year.

The central bank will meet on policy on Wednesday and Thursday of next week, but traders are eyeing a gathering in October for a potential rate hike, putting the odds at about a coin toss.

The trade agreement announced late on Tuesday by US President Donald Trump reduced a baseline tariff rate and autos-specific levies to 15 per cent, from the 25 per cent duties Washington had threatened previously.

The Topix transport equipment index gained 0.8 per cent, adding to the previous session’s nearly 11 per cent surge.

On Wednesday, the Topix gained 3.2 per cent and the Nikkei climbed 3.5 per cent. REUTERS