Japan Nikkei rises to near two-week highs

The Japan share market closed near two-week highs on Monday, 10 June 2019, as investor risk appetite was bolstered after President Donald Trump announced late Friday that he would drop plans for tariffs on Mexico in return for more stringent efforts to control illegal border crossings. Market gains were, however, limited as the stand-off between China and the United States remains unresolved, with eyes on a possible meeting between Trump and Xi Jinping at the G20 summit in Japan this month. At closing bell, the 225-issue Nikkei Stock Average advanced 1.2%, or 249.71 points, to 21,134.42, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange grew 1.34%, or 20.55 points, at 1,552.94.

All 33 subsectors of the Topix's were in positive territory, with Textiles & Apparels, Oil & Coal Products, Electric Appliances, Precision Instruments, Mining, and Pulp & Paper issues being notable gainers.

The market mood was brightened after the North American neighbours reached a last-minute immigration deal Friday that averted the imposition of 5% levies on Mexican imports and opening up of another front in Trump's global trade battle.

Market gains were, however, limited despite Trump drop Mexico tariffs threat, as the stand-off between China and the United States remains unresolved, with eyes on a possible meeting between Trump and Xi Jinping at the G20 summit in Japan this month.

Shares of automakers soared, with Toyota Motor Corp rising 1.2%, Honda Motor Co advancing 1% and Mazda Motor Corp surging 1.2%. Japanese automakers have long built vehicles in Mexico, taking advantage of the country's cheap labour, trade deals and proximity to the United States, the world's largest auto market after China.

Shares of telecom operator declined after reports that the government will require major carries to slash the penalty fees from 9,500 yen to below 1,000 yen, when customers cancel their contracts within two years to make it easier for customers to switch mobile phone contracts and increase competition among carries. NTT Docomo and SoftBank Corp both dropped 1.5%, while KDDI Corp shed 2%.

CURRENCY NEWS: Japanese yen was little softer against greenback on Monday, as investors appetite for safe haven currency dimmed after Donald Trump dropped threatened tariffs against Mexico, while weak US jobs data fanned expectations the Federal Reserve will cut interest rates next month. The dollar was quoted at 108.43-45 yen compared with 108.17-27 yen in New York and 108.46-47 yen on Friday in Tokyo.

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