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Japan stocks advance as stimulus hopes calm global recession fears

Published 19/08/2019, 07:41
© Reuters.  Japan stocks advance as stimulus hopes calm global recession fears
JP225
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TOPX
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8306
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8316
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7532
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8028
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TREIT
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By Tomo Uetake

TOKYO, Aug 19 (Reuters) - Japanese shares rose on Monday as

signs central banks around the world are taking steps to support

their economies helped ease immediate concerns about a global

recession.

However, buyers were somewhat restrained as the U.S.-China

trade dispute remained a nagging worry.

The Nikkei share average .N225 climbed 0.7% to 20,563.16

points, while the broader Topix .TOPX added 0.6% to 1,494.33.

"Improving external factors buoyed Japanese stocks today but

the trading was quite subdued," said Takashi Hiroki, chief

strategist at Monex Securities.

"There is a wait-and-see mood ahead of this week's Jackson

Hole symposium as investors are keen to get fresh hints from

Federal Reserve Chairman (Jerome) Powell."

Turnover on the Tokyo Stock Exchange's main board was thin

at 1.54 trillion yen, its lowest in six weeks, and well below

its daily average of 2.33 trillion yen over the past year.

On Friday, Der Spiegel magazine reported that Germany's

coalition government was prepared to set aside its balanced

budget rule in order to take on new debt and launch stimulus

steps to counter a possible recession. In addition, China's central bank unveiled a key interest

rate reform on Saturday, in a move viewed as a guided rate cut,

to help steer borrowing costs lower for companies and support a

an economy gripped by the bruising trade war with the United

States. Those stimulus hopes helped yields on U.S. Treasuries and

Japanese government bonds 0#JPTSY=JBTC rise on Monday from

multi-year lows. US/N JP/T

That boosted rate-sensitive banks, which were battered by

the sharp drop in bond yields last week, with Mitsubishi UFJ

Financial Group 8306.T advancing 1.3% and Sumitomo Mitsui

Financial Group 8316.T rising 0.8%.

Another rate-sensitive TSE REIT index .TREIT remained in

demand, up 0.2% to extend its winning streak to a seventh day to

a fresh 12-year high.

However, trade fears are still alive and weighing on

investor sentiment as U.S. President Donald Trump on Sunday said

he did not want the United States to do business with China's

Huawei HWT.UL even as the administration weighs whether to

extend a grace period for the company. Other notable movers include FamilyMart Uny Holdings

8028.T , jumping 8.7%, after the convenience chain operator

said it will buy as much as around 16 million additional shares

in Pan Pacific International Holdings 7532.T through August

2021. Pan Pacific, discounter Don Quijote's parent,

rose 4.2%.

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