Stock Market Climbs for Two Consecutive Days as Trade Worries Diminish – Nikkei Edition
Tokyo, Japan – Japan's Nikkei 225 and Topix Indices Rise on Monday Amid Improved Global Trade Prospects
Japan's Nikkei share average increased by 1% to approximately 37,350, and the broader Topix rose 0.6% to close at 2,744 on Monday, extending gains from the previous sessions[1][3]. This upward trend can be attributed to several factors, including a weakening Japanese yen, which enhances the competitiveness of the country's export-driven industries and attracts foreign investors[5].
One of the key drivers on Monday was the easing trade tensions between the United States and the European Union, bolstering risk appetite among investors[3]. Nippon Steel experienced a surge, jumping as much as 7.4%, following U.S President Donald Trump's apparent approval of the company's prolonged takeover of US Steel. The company eventually closed 2.1% higher[3].
Moreover, demand for equities rose broadly after Trump extended a tariff deadline on EU imports to July 9, following his push for a potential 50% levy on the bloc just two days earlier[3].
Japanese government bonds also rallied during the day, following a turbulent week during which super-long yields reached all-time highs[5]. According to Nomura's chief macro strategist, Naka Matsuzawa, the market is becoming increasingly skeptical about the sincerity of tariff policy, particularly after Trump announced lower tariff rates on China[5].
In summary, the increased optimism surrounding global trade and improved economic activity resulted in gains for the Nikkei 225 and Topix indices on Monday. The weakening yen also played a significant role in boosting Japan's export-driven industries and attracting foreign investors. The potential influence of local economic conditions and the yen's value surpassed that of US-EU trade tensions and President Trump's decisions, as detailed in the available information.
- The rally in Japanese government bonds on Monday suggests a general-news trend of increased skepticism about tariff policies, particularly after President Trump announced lower tariff rates on China.
- The improved risk appetite among investors, driven by the easing trade tensions between the United States and the European Union, has a direct impact on the finance sector, as evidenced by the rise in demand for equities and the subsequent gains in Japan's Nikkei 225 and Topix Indices.
- The political environment, influenced by decisions such as President Trump's apparent approval of Nippon Steel's prolonged takeover of US Steel, can significantly affect business operations and, consequently, the overall stock market performance, as illustrated by Nippon Steel's surge on Monday.
