By Stanley White
TOKYO, Nov 25 (Reuters) - Japanese stocks rose by the most
in two weeks on Monday as investors turned more confident the
United States and China could reach an agreement to de-escalate
their trade war.
The Nikkei index ended Monday up 0.78% at 23,292.81 points,
the biggest increase since Nov. 12, as exporters in the IT
sector and the industrial equipment sector led the advance,
because they benefit from an increase in overseas demand.
The latest wave of optimism came after U.S. President Donald
Trump said on Friday a trade deal with China is "potentially
very close." Chinese President Xi Jinping also reiterated his
desire on Friday for a preliminary trade deal. That confidence was reinforced on Monday when China's Global
Times said both countries were "very close" to a phase one trade
deal and that China was willing to negotiate for a phase two or
even a phase three trade deal. However, traders remain sceptical amid conflicting signals
from both sides, which have caused markets to swing between
gains and losses.
"There have been some comments suggesting progress in
resolving the U.S.-China dispute, but there are still a lot of
risks posed by things like the situation in Hong Kong," said
Shusuke Yamada, head of FX and Japan equity strategy at Merrill
Lynch Japan Securities in Tokyo.
"Hope hasn't completely collapsed, but we need to closely
watch how this plays out."
There were 191 advancers on the Nikkei index against 29
decliners on Monday.
The largest percentage gainers in the index were steel maker
JFE Holdings Inc 5411.T , which rose 4.19%, followed by Hitachi
Construction Machinery Co Ltd 6305.T and Pacific Metals Co Ltd
5541.T , which climbed 4.18% and 4.16%, respectively.
The biggest index losers were electronics maker Panasonic
Corp 6752.T , which fell 2.29%, followed by telecoms facilities
builder Comsys Holdings Corp 1721.T and Hino Motors Ltd
7205.T , which fell 2.14% and 1.94%, respectively.
Washington and Beijing have imposed tariffs on each other's
goods in a 16-month long dispute over Chinese trade practices
that the U.S. government says are unfair.
The tariffs have slowed trade flows and economic growth,
making them the biggest risks to the global economy.
If the two sides can agree to roll back even some of these
tariffs, that could spark a global rally in equities and other
risk assets.
The Topix index .TOPX rose 0.69% on Monday to 1,702.96.
The volume of shares traded on the Tokyo Stock Exchange's
main board .TOPX was 0.89 billion, compared to the average of
1.27 billion yen in the past 30 days.
(Editing by Sam Holmes)