TOKYO: Japan's Nikkei rallied hard to end near six-week highs on Wednesday on news that the United States and China will revive talks on trade, while expectations the US Federal Reserve will cut rates this year supported sentiment.
The Nikkei share average jumped 1.7 per cent to close at 21,333.87, the highest closing level since May 10.
US President Donald Trump said he would meet with Chinese President Xi Jinping at the G20 summit later this month, and said talks between the two countries would restart after a recent lull.
"Investors are taking heart from the new development. The two countries will at least be talking (after a lull), so the market thinks there is little chance that talks get broken off soon after they meet," Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute.
Hirakawa also said support for risk appetite came from hopes and expectations of monetary easing in both the United States and Europe.
The Fed concludes its two-day policy meeting later Wednesday, with analysts expecting rates to be left unchanged but also setting the stage for possible easing later this year.
On Tuesday, European Central Bank President Mario Draghi hinted at more stimulus if regional inflation fails to pick up toward its target, sending global yields lower.
The broader Topix gained 1.7 per cent to 1,555.27, with all of its subsectors in positive territory.
Companies with large exposure in China such as tech shares and electric component makers outperformed, with Advantest Corp surging 5.4 per cent, Taiyo Yuden up 5.6 per cent and TDK Corp up 4Read More – Source
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