Nikkei touches 13-1/2-month high on U.S.-China trade talks progress

By Tomo Uetake
TOKYO, Nov 26 (Reuters) - Japan's benchmark Nikkei hit its
highest level in more than a year on Tuesday, led by electronics
part and semiconductor-related stocks as a weaker yen and
progress in Sino-U.S. trade talks buoyed appetite for
export-oriented firms.
The Nikkei share average .N225 climbed as much as 1.4% to
23,608.06, its highest level since Oct. 5, 2018, but was then
hit by some profit-taking to close at 23.373.32, 0.4% higher on
the day.
Tokyo shares extended early gains after China's commerce
ministry said Vice premier Liu He, China's chief trade
negotiator, held a call with his U.S. counterparts and that both
sides agreed to maintain communication on remaining
issues. "Some hedge funds that had staked out short positions in
developed world stocks have begun unwinding those positions now
that short-term downside tests are looking less likely," said
Masanari Takada, cross-asset strategist at Nomura Securities.
"With no major bad news coming in, some players appear to
have been inexorably pulled back into taking on risk, thinking
it was a bad call to try to capture the downside. It looks like
we are seeing typical early symptons of FOMO (fear of missing
out)."
Wall Street's three major stock indexes .SPX .DJI .IXIC
closed at records on Monday on the reports of progress on a
tariff truce between the world's two largest economies. .N/C
A Chinese state-backed tabloid said Beijing and Washington
were "very close" to an initial pact, which lifted New
York-listed semiconductor and other trade-sensitive stocks.
Taking a positive cue from this, chip-related and
electronics component firms were also buoyant in Tokyo on
Tuesday.
Advantest Corp 6857.T climbed 3.6% and Tokyo Electron Ltd
8035.T rose 2.7%, while Murata Manufacturing Co 6981.T and
TDK Corp 6762.T jumped 4.6% and 3.7%, respectively.
The Japanese yen JPY= weakened by as much as 0.3% to
109.205 versus the dollar on Tuesday, supporting exporters as a
softer yen boosted overseas corporate profits.
Export-oriented Sony Corp 6758.T climbed 2.7%, Panasonic
Corp 6752.T added 1.4%, while Nissan Motor Co 7201.T rose
1.2%.
Hitachi Ltd 6501.T gained 0.9% after the Nikkei business
daily reported on Monday that the Japanese conglomerate is
nearing a deal to sell its 51% stake in Hitachi Chemical Co to
Showa Denko KK 4004.T in a transaction that could be worth
about 950 billion yen ($8.7 billion). Hitachi Chemical 4217.T soared 15.4%, while Showa Denko
4004.T shed 6.0% to become the seventh-most traded stocks on
the main board as the transaction amount appears to be too big
for the chemical engineering group.
Elsewhere, Asahi Kasei Corp 3407.T advanced 1.7% after the
Japanese chemical firm made a $1.3 billion offer to buy
Denmark's pharmaceutical company Veloxis VELOX.CO .
The broader Topix .TOPX rose 0.2% to 1,705.71, while the
Mothers index for startups .MTHR climbed 1.2% to 905.19, its
highest level in near four month.

($1 = 108.6400 yen)