Japan's Nikkei rebounds, yen weakens as trade talks begin in Washington

Reuters
04-17
Japan's Nikkei rebounds, yen weakens as trade talks begin in Washington

By Kevin Buckland

TOKYO, April 17 (Reuters) - Japan's Nikkei share average bounced back on Thursday from the previous session's declines, helped by a weaker yen as Tokyo kicked off closely watched trade negotiations in Washington.

The Nikkei .N225 ended the morning session up 0.9% at 34,212.29, making back most of the ground lost in Wednesday's 1% slide.

The broader Topix .TOPX added 0.8%.

Japan's chief negotiator, economy minister Ryosei Akazawa, met U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson on Wednesday, with President Donald Trump also making a surprise appearance.

Speaking to reporters after the discussions, which Trump had lauded on social media as making "big progress", Akazawa said Washington wants a deal with Tokyo as a "top priority."

He also revealed that currencies had not figured in the first round of negotiations, spurring a rebound in the dollar-yen exchange rate after it had earlier slipped to the lowest since September.

A weaker yen generally provides a tailwind for Japanese equities because it increases the value of exporters' overseas revenues.

Last month, Trump had accused Tokyo of pursuing a policy to devalue the yen, giving Japan an unfair trade advantage.

Mazda Motor 7261.T, which is heavily reliant on the U.S. market, jumped 2.1%. Toyota 7203.T added 0.6%.

Elsewhere, many stocks that suffered selling on Wednesday were bought back. Among the gainers was chip-testing equipment maker and Nvidia supplier Advantest 6857.T, which climbed 3% after tumbling 6.6% on Wednesday.

Chips are a particular focus with Taiwan's TSMC due to report earnings when Tokyo markets are in the afternoon session, and domestic chip-making machinery manufacturer Disco 6146.T announcing financial results after the closing bell. Disco was up 0.4%.

The best performer among the Tokyo Stock Exchange's 33 industry groups was oil and coal producers .IPETE.T, which advanced 2.8% on firmer crude prices.

However, Jefferies analysts warn that Japanese stocks will struggle to make much more headway amid Trump's global trade battles, with a 12-month target of 35,500 for the Nikkei.

"We expect mixed messaging to induce steep volatility in the near term and heightened uncertainty over the medium/long term," the analysts said in a report.

"The supply chain disruptions and capex delays could hurt global growth in the near term and have a disproportionate impact on Japan's earnings, given the high operating leverage."

(Reporting by Kevin Buckland; Editing by Eileen Soreng)

((Kevin.Buckland@thomsonreuters.com;))

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