By Kevin Buckland
TOKYO, May 13 (Reuters) - Japan's Nikkei share average jumped to the highest in almost three months on Tuesday as the U.S. and China agreed to temporarily slash harsh reciprocal tariffs, easing concerns that their trade war could trigger a global recession.
The Nikkei .N225 surged as much as 2.3% to 38,494.06 shortly after the open, a level last seen on February 21, before entering the midday recess up 1.7% at 38,296.86.
Of the index's 225 components, 152 rose, compared to 73 that fell.
The broader Topix .TOPX gained 1.2%.
Under the truce announced on Monday, the U.S. will cut extra tariffs it imposed on Chinese imports last month to 30% from 145% for the next three months, while Chinese duties on U.S. imports will fall to 10% from 125%.
But the pause did little to address the underlying schisms that led to the dispute, including the U.S. trade deficit with China.
"For now, some of the uncertainty surrounding the global trade situation has been relieved," said Maki Sawada, a strategist at Nomura.
"Tariffs were slashed more than expected," she said. "U.S. stagflation concerns have come down a notch."
Shipping .ISHIP.T was the top performer among the Tokyo Stock Exchange's 33 industry groupings, climbing 4.2%.
Banking .IBNKS.T was next with a 3.8% advance, as a jump in bond yields improved the outlook for investment and lending income.
Pharma .IPHAM.T rebounded 3.6% following Monday's steep drop as U.S. President Donald Trump moved to reduce prescription drug and pharmaceutical prices.
Automakers .ITEQP.T gained 2.7% following a sharp drop in the yen against the dollar JPY= overnight, which boosts the value of overseas revenues.
Toyota 7203.T climbed 3.7%, and Nissan 7201.T advanced 3.2%.
Nissan announces financial results after the bell, with national broadcaster NHK reporting the troubled carmaker plans more than 10,000 additional layoffs globally.
(Reporting by Kevin Buckland; Editing by Mrigank Dhaniwala)
((Kevin.Buckland@thomsonreuters.com;))
Comments