Tokyo stocks likely to be swayed by trade developments this week
06 October, 2019
Tokyo stocks this week are seen being swayed by developments in U.S.-China talks to resolve their trade dispute, with bilateral ministerial talks expected to be held for two days from Thursday.
Last week, the benchmark 225-issue Nikkei average tumbled 468.70 points, or 2.14 percent, to end Friday at 21,410.20 on the Tokyo Stock Exchange.
The drop reflected concerns over deterioration in the U.S. economy, in response to worsening figures in the U.S. manufacturing index for September, announced on Tuesday by the U.S. Institute for Supply Management, employment data for the same month by Automatic Data Processing Inc. on Wednesday, and the ISM’s September nonmanufacturing index on Thursday.
This week, the Nikkei is expected to move mainly between 20,900 and 21,700, analysts and brokers said.
Market sources said that news about the trade talks and statements by U.S. President Donald Trump and others before and during the talks are expected to have a big impact on market moves.
The Tokyo market “may rise if the United States and China reach an agreement even if partially,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.
Yutaka Miura, senior technical analyst at Mizuho Securities Co., also suggested that the Nikkei may climb if “Trump makes any comments on an agreement between the two nations, to help the U.S. market make up for its tumble [last] week.”
On the other hand, the market sources said that the Nikkei may drop on negative news related to the trade talks.
Miura said that dismal U.S. employment statistics may cause the Nikkei to fall below 21,000 if concerns over the downturn in the U.S. economy outweigh expectations of an interest rate cut by the U.S. Federal Reserve at its Federal Open Market Committee meeting in late October.
TAG(s):