TOKYO: Japan’s Nikkei share average rose on Tuesday, with a pause in the yen’s rally supporting automakers and other exporters, while resilience on Wall Street despite the US sovereign downgrade buoyed overall sentiment.
At the same time, uncertainty at the start of the three-day Group of Seven meetings of finance ministers and central bank chiefs in Canada later in the day makes it “difficult for traders to move,” said Maki Sawada, a strategist at Nomura.
Finance ministers will strive for unity on non-tariff issues at the gathering, but may have trouble reaching consensus with a Trump administration intent on pushing allies to serve US interests.
Nikkei rose 0.6% as of 0148 GMT, while the broader Topix added 0.3%.
Investors worry that US officials may push for a weaker dollar as part of tariff negotiations. Trade tensions with China are also far from resolved, in spite of a recent rapprochement.
“This is not an environment where we can be complacent about the Sino-US trade relationship,” said Nomura’s Sawada.
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“Developments are likely to continue to swing stock markets.”
Automakers were among the top performers as some weakening of the yen boosted the value of overseas revenues.
Toyota added 1.2% and Mazda jumped 5%.
As a sector, car manufacturers and suppliers gained 1.4% to be the second-best performer among the Tokyo Stock Exchange’s industry groups.
Non-ferrous metals was the top gainer with a 2.1% advance.
Sony gained 3.2%.
The yen strengthened as far as 144.665 per dollar on Monday, extending a rally that began a week ago when the currency was at 148.455, but has since stabilized.
Strength in chip-related shares was another factor pulling the Nikkei higher, with Advantest gaining 2.8% and Tokyo Electron advancing 1.8%.
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