Nikkei Achieves Multi-Session Gains Amid Tariff Talk Optimism

Tokyo’s Nikkei average experienced an upswing on Friday, fueled by positive sentiment surrounding advancements in tariff discussions and a depreciating yen. This trajectory positions the index to potentially record its most extended period of gains in almost two years.

By the midday recess, the Nikkei had increased by 0.69%, reaching 36,705.53. It is currently on track to register its seventh consecutive session of growth, marking its longest streak since August 2023.

The index is also poised to rise by 2% for the week, potentially securing its third successive week of gains. The broader Topix index saw a slight increase of 0.16%, settling at 2,683.61.

Shoichi Arisawa from IwaiCosmo Securities noted that the ongoing tariff negotiations between Japan and the US appear to be progressing as expected, providing a reassuring signal. He further added that news regarding discussions between China and the US positively influenced US stock futures, consequently benefiting the Nikkei.

Ryosei Akazawa, Japan’s lead economic negotiator, engaged in discussions with his US counterpart and conveyed his intention to hold a third round of talks later in the month. Separately, the Commerce Ministry in China indicated that the US has sought discussions with China concerning tariffs, and Beijing remains open to such dialogues.

Following the remarks from China, the Nikkei extended its gains, mirroring the upward movement in S&P and Nasdaq futures.

Arisawa pointed out that the Nikkei has effectively recovered from the losses incurred since the tariff announcements, although gains were somewhat limited on Friday ahead of Japan’s extended weekend and the release of US nonfarm payroll data.

A weaker yen has also contributed to increased interest in Japanese equities.

The yen’s value decreased after the Bank of Japan revised its growth projections downwards due to tariffs and decided to maintain interest rates steady on Thursday.

Fast Retailing, the parent company of Uniqlo, saw a rise of 1.44%, making it the most significant contributor to the Nikkei’s gains. Yamato Holdings experienced a surge of 3.69% following a robust annual operating profit forecast.