Japan’s Nikkei stock index climbed for the fourth consecutive day on Wednesday. This rise followed an agreement between U.S. and Chinese officials on a trade framework. The deal aims to revive trade talks and remove China’s restrictions on rare earth materials. This boosted investor confidence and demand for risk assets like stocks.
By midday, the Nikkei 225 Index increased by 0.5%, marking its longest winning streak in about a month. Despite the gains, the index remains down 4.2% for the year. The broader Topix index stayed mostly flat.
Shares of major chip companies saw strong gains. Sumco, a key semiconductor materials supplier, jumped 7 percent. Tokyo Electron, an electronic device maker, rose 3.6 percent. Mazda Motor increased 1.2 percent, helped by a weaker yen. A weaker yen makes Japanese exports more competitive in overseas markets.
The progress in U.S.-China trade talks eased tensions that had unsettled global markets for months. President Donald Trump’s tariff disputes had largely been factored into global stock prices. However, Japanese stocks have not yet recovered to their early-year highs.
Experts say the recent rise in the Nikkei reflects improving market sentiment. Upcoming meetings of the Bank of Japan and the U.S. Federal Reserve next week could influence market direction. Summer bonuses and dividend payments in Japan may also add money to the market.
Sumco was the biggest gainer on the Nikkei, followed by Isetan Mitsukoshi, a retail group that rose 6.2 percent. Meanwhile, Hino Motors, a truck manufacturer and Toyota unit, dropped 17 percent. Hino announced plans to issue new shares as part of its merger agreement with Mitsubishi Fuso, which caused concern among investors.
The renewed trade truce between the U.S. and China may lead to more stable economic growth in both countries. For Japan, smoother trade relations are positive news, especially with the easing of China’s rare earths controls. These materials are essential for many technologies, including electric vehicles and electronics.
Despite recent gains, the Nikkei remains below levels seen earlier this year. Investors are advised to watch central bank meetings closely, as any shifts in interest rates or economic outlooks could affect the market’s momentum.