Japanese stocks post biggest gain in 3 weeks on hopes for trade war truce

By Stanley White
TOKYO, Nov 25 (Reuters) - Japanese stocks rose on Monday by
the most in three weeks as investors turned optimistic about the
chance that the United States and China will reach an agreement
to de-escalate their trade war.
At 0142 GMT the Nikkei index was up 0.88% to 23,315.15 as
exporters in the industrial equipment sector and the IT sector
led the advance, because they benefit from an increase in
overseas demand.
The latest wave of optimism came after U.S. President Donald
Trump said on Friday a trade deal with China is "potentially
very close." Chinese President Xi Jinping also reiterated his
desire on Friday for a preliminary trade deal. However, some traders say they remain sceptical because
negotiations between the world's two-largest economies have been
fraught and conflicting signals from both sides have caused
markets to swing between gains and losses.
"There have been some comments suggesting progress in
resolving the U.S.-China dispute, but there are still a lot of
risks posed by things like the situation in Hong Kong," said
Shusuke Yamada, head of FX and Japan equity strategy at Merrill
Lynch Japan Securities in Tokyo.
"Hope hasn't completely collapsed, but we need to closely
watch how this plays out."
There were 206 advancers on the Nikkei index against 16
decliners on Monday.
The largest percentage gainers in the index were industrial
components maker TDK Corp 6762.T , which rose 3.48%, followed
by non-ferrous metal producer Toho Zinc Co Ltd 5707.T , gaining
3.42%, and Hitachi Construction Machinery Co Ltd 6305.T , up by
3.36%.
The largest percentage losses in the index were Sumitomo
Dainippon Pharma Co Ltd 4506.T , down 2.35%, followed by Hino
Motors Ltd 7205.T , losing 2.03% and electronics maker
Panasonic Corp 6752.T , down by 1.54%.
Washington and Beijing have imposed tariffs on each other's
goods in a 16-month long dispute over Chinese trade practices
that the U.S. government says are unfair.
The tariffs have slowed trade flows and economic growth,
making them the biggest risk to the global economy.
If the two sides can agree to roll back even some of these
tariffs, that could spark a global rally in equities and other
risk assets.
The Topix index .TOPX rose 0.82% on Monday to 1,705.14.
The volume of shares traded on the Tokyo Stock Exchange's
main board .TOPX was 0.4 billion, compared to the average of
1.27 billion in the past 30 days.

(Editing by Sam Holmes)