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Japan stocks edge higher as stimulus optimism eases global recession worries

Published 19/08/2019, 04:14
© Reuters.  Japan stocks edge higher as stimulus optimism eases global recession worries
US500
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DJI
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JP225
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IXIC
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US10YT=X
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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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TOKYO, Aug 19 (Reuters) - Japanese shares advanced on Monday

after hopes of more stimulus from central banks around the world

and steps being taken by major economies such as Germany and

China eased immediate concerns about a slowing global economy.

However, the gains were limited as the U.S.-China trade

dispute remained a nagging worry for market participants.

The Nikkei share average .N225 rose 0.5% to 20,525.45

points, while the broader Topix .TOPX added 0.4% to 1,491.44

by the midday break.

On Wall Street, all three major stock averages closed higher

.DJI .SPX .IXIC on Friday as an ebbing bond rally and news

of potential German economic stimulus brought buyers back to the

equities market. .N/C

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. German stimulus hopes helped the benchmark 10-year U.S.

Treasury yield US10YT=RR rise from three-year lows, while

Japanese government bond yields 0#JPTSY=JBTC took their cue

from the Treasury market and ticked up on Monday. US/N JP/T

Rising bond yields gave a boost to rate-sensitive banks,

which were battered badly by sharp drop in bond yields last

week, with Mitsubishi UFJ Financial Group 8306.T climbing 1.1%

and Sumitomo Mitsui Financial Group 8316.T rising 0.9%.

Another rate-sensitive TSE REIT index .TREIT added 0.3%,

extending its winning streak to a seventh day to hit its fresh

12-year highs since 2007.

At the weekend, China unveiled a new benchmark interest rate

to be launched on Tuesday to help lower borrowing costs and

support the slowing economy. Analysts say the new rate will be

lower than the current one, but are divided over the size of the

cut. However, trade fears are still running quite high 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 . Other notable movers include FamilyMart Uny Holdings

8028.T , up 11.6%, 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 gained 3.1%.

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