[TOKYO] Tokyo stocks closed higher on Monday, extending global rallies as optimism grew over a breakthrough in efforts to defuse a US-China trade war.

The benchmark Nikkei 225 index rose 0.26 per cent or 53.26 points to 20,719.33 while the broader Topix index was up 0.56 per cent or 8.78 points at 1,566.37.

"A set of positive factors - hopes for progress in US-China trade talks, rallies on Wall Street and a relatively weak yen - were all behind the gain," said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

On Friday, Wall Street stocks rose for the fourth straight session, closing out a strong week on optimism over US-China trade talks.

China said Monday its economy grew at its slowest pace in almost three decades in 2018, losing more steam in the last quarter.

"But the impact of China's GDP on the market was limited as the figures were within expectations," Mr Horiuchi told AFP.

The market is watching the International Monetary Fund's growth forecasts due later in the day, brokers said.

The dollar fetched 109.55 yen in Asian afternoon trade, down from 109.72 yen in New York late Friday but still up from 109.36 yen in Tokyo on Friday.

Panasonic jumped 3.30 per cent to 1,093.5 yen and Toyota was up 0.27 per cent at 6,817 yen after a weekend report that the electronic giant and the car titan will set up a joint venture to manufacture batteries for electric vehicles.

Nissan was up 0.43 per cent at 917.5 yen amid reports the French government has told Tokyo that it wants a merger between Renault and the Japanese car giant following the arrest of former Nissan chairman Carlos Ghosn.

French Economy Minister Bruno Le Maire on Sunday dismissed the reports of merger talks, saying "the subject is not on the table".

AFP