Japan Nikkei extends gain on Mexico deal, Sino-U.S. rift caps gains

The Japan share market extended gains on Tuesday, 11 June 2019, on tracking positive close of US market overnight after the U.S. reached an agreement with Mexico on tariff. Market gains were, however, limited as fresh U.S. trade threats against China, with eyes on a possible meeting between Trump and Xi Jinping at the G20 summit in Japan this month. Around afternoon trade, the 225-issue Nikkei Stock Average advanced 0.35%, or 73.67 points, to 21,208.09, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange grew 0.5%, or 7.53 points, at 1,560.47.

Total 25 subsectors out of 33 subsectors of the Topix's were in positive territory, with Securities & Commodities Futures, Mining, Banks, Iron & Steel, and Pulp & Paper issues being notable gainers, while Land Transportation, Warehousing & Harbor Transportation Services, and Precision Instruments issues were notable losers.

The market mood was brightened on tracking positive close of US market overnight after President Donald Trump suspended plans to impose tariffs on Mexican goods after the countries struck a deal on immigration. The Dow Jones Industrial Average rose 78.74 points, or 0.3%, higher at 26,062.68. The S&P 500 gained about 0.5% at 2,886.73. The Nasdaq Composite rose 1.1% to 7,823.17.

Market participants are awaiting for a possible meeting between Trump and Xi Jinping at the G20 summit in Japan this month. The US President Donald Trump said Monday that he expects to meet with Chinese President Xi Jinping at the Group of 20 summit at the June 28-29 summit in Osaka, Japan although China is yet to confirm any such meeting. That may have given investors some cause for optimism in the dispute between Washington and Beijing, though Trump noted that an additional wave of U.S. tariffs on Chinese goods will go into effect if the Xi cannot make progress in trade talks with Chinese President Xi Jinping at the G20 summit.

CURRENCY NEWS: Japanese yen marginally depreciated against greenback on Tuesday, on softening demand for safe haven currency after the United States and Mexico agreed on a deal to avoid tariffs. The dollar rose to 108.64 Japanese yen from 108.44 yen on Monday.

COMMODITY NEWS: U.S. West Texas Intermediate (WTI) crude oil futures were up 0.13% at $53.33 per barrel on Tuesday, finding some traction after sliding the previous day. Crude oil fell on Monday, as major producers Saudi Arabia and Russia had yet to agree on extending an output-cutting deal and with U.S.-China trade tensions continuing to threaten demand for the commodity. Benchmark U.S. crude slid by 1.4% to settle at $53.26 a barrel on Monday. Brent crude oil, the international standard, closed 1.6% lower at $62.29 a barrel on Monday.

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