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

Reuters
17 Apr
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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