Japan Market trades higher

Headline indices of the Japan share market were higher on Tuesday, 24 September 2019, as risk sentiments boosted up on tracking gains on the Dow Jones Industrial Average overnight and hopes for upcoming high-level U.S.-China trade talks. Market gains were, however, limited amid lingering concerns about slowing global growth after preliminary manufacturing PMI number released from the Eurozone came in lower-than-estimates. Around late afternoon, the 225-issue Nikkei Stock Average advanced 42 points, or 0.2%, to 22,121.07, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange added 7.56 points, or 0.47%, at 1,623.79.

Total 24 out of 33 industry category of Topix index gained into positive territory, with Insurance, Retail Trade, Land Transportation, Metal Products, and Textiles & Apparels issues being notable gainers, while Mining, Marine Transportation, Securities & Commodities Futures, and Wholesale Trade issues were notable losers.

Over the weekend, the U.S. Trade Representative's office issued a brief statement characterizing the two days of talks with China as "productive." It added that a principal-level trade meeting in Washington would take place in October, as previously planned. China's Commerce Ministry, in a brief statement, described the talks as "constructive", and said they had also had a good discussion on "detailed arrangements" for the high-level talks in October. Additionally, the United States removed tariffs from more than 400 Chinese products in response to requests from U.S. companies. Despite the improved tone, there were fears a cancelled US farm visit by a Chinese delegation could be a sign of possible disagreement.

Concerns over a slowing global economy remained front and centre for financial markets, as poor business activity readings from the euro zone deepened fears of a recession and suggested more stimulus was required. The flash eurozone manufacturing purchasing managers index fell to an 83-month low of 45.6 in September, down from 47 in August. German manufacturing PMI fell to 41.4 in September from 43.5, the worst reading in more than a decade, as uncertainty around trade wars, the outlook for the car industry and Brexit paralyzing order books. The flash eurozone services PMI fell to an 8-month low of 52 from 53.5 in August. European PMI survey data indicate that GDP looks set to rise by just 0.1% in the third quarter, with momentum weakening as the quarter closed.

From the US, market participants will be keeping an eye on consumer confidence number; the better-than-expected number could support the greenback on lower levels.

CURRENCY NEWS: The Japanese yen softened against greenback on Tuesday. The dollar traded at 107.57 yen, having hit two-week highs of 107.32 on Monday.

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