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Nikkei hits 13-mth peak, cyclicals back in favour

Published 08/11/2019, 07:33
Updated 08/11/2019, 07:36
© Reuters.  Nikkei hits 13-mth peak, cyclicals back in favour
JP225
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TOPX
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4543
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2503
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4911
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3099
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4755
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IBNKS.T
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ISTEL.T
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ITEQP.T
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7203
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4385
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* Nikkei, Topix at 13-mth high

* Despite uncertainties, U.S.-China tariffs rollback hopes

* Toyota hits 4-yr high as cyclicals gain

* Shiseido, Rakuten, Mercari down on earnings

By Hideyuki Sano

TOKYO, Nov 8 (Reuters) - Japan's benchmark stock index

rallied to a 13-month high on Friday on growing optimism for the

economy, before paring part of those gains due to conflicting

reports on how much progress has been made in U.S.-China trade

negotiations.

The Nikkei average .N225 was up 0.26% at 23,391.87, after

climbing to as high as 23,591.09 - the highest point since Oct.

10 of last year. For the week, the index logged a 2.37% gain for

its fifth consecutive weekly rise.

The broader Topix .TOPX advanced 0.27% to 1,702.77, its

highest in more than a year, with trade turnover reaching 3.12

trillion yen ($28.6 billion), 47% above the average over the

past three months.

The Chinese commerce ministry said on Thursday that the two

countries had agreed to cancel the tariffs in phases, which was

confirmed by a U.S. official, who spoke on condition of

anonymity. Although the plan appears to have met opposition from some

advisers to U.S. President Donald Trump and there is no clarity

on when and where the deal will be signed, investors have so far

bet that a deal will come through in the end.

"If you think corporate earnings will recover from here, you

can expect further rise in share prices. Investors are now

starting to expect such a scenario, which you can tell from the

fact that cyclicals such as financials and energy shares are

doing well," said Takuya Hozumi, global investment strategist at

Mitsubishi UFJ Morgan Stanley.

Carmakers .ITEQP.T and steelmakers .ISTEL.T rose 1.4%,

and banks .IBNKS.T gained 0.9%.

Toyota 7203.T rose 2.2% to four-year highs, helped by its

release of a share buyback plan and estimates-beating quarterly

results. Terumo 4543.T rose 13.4% to record highs after the medical

equipment maker posted strong earnings in the three months to

September.

Isetan Mitsukoshi 3099.T jumped 11.7% after the department

store operator posted upbeat quarterly earnings and announced a

share buyback.

Kirin Holdings 2503.T gained 9.6% after the beer and

beverage maker announce a buy-back totalling up to 6.8% of its

shares.

On the other hand, Shiseido 4911.T shed 8.3% after the

cosmetics maker cut its outlook on poor sales in South Korea and

Hong Kong.

Rakuten 4755.T dropped 4.5% as its quarterly operating

profit was almost wiped out in the three months ended September

as investment in its e-commerce and mobile units weighed on

profits, with the value of its bet on ride-hailing firm Lyft

also sliding. Mercari 4385.T lost 18.9% after the internet shopping

service operator's earnings underwhelmed investors.

($1 = 109.2600 yen)

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