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Tokyo: Stocks jump on speculation over US rate cut

[TOKYO] Tokyo stocks jumped on Monday, tracking rallies on Wall Street after a weak US jobs report bolstered expectations that the Federal Reserve would soon cut interest rates.

The benchmark Nikkei 225 index rose 1.20 per cent, or 249.71 points, to close at 21,134.42, while the broader Topix index was up 1.34 per cent, or 20.55 points, at 1,552.94.

The closely watched US Labor Department data showed "the US economy is slowing to the extent that a rate cut is expected, but not to the extent of prompting worries over a recession", said Masayuki Kubota, chief strategist at Rakuten Securities, in a commentary.

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"In a nutshell, it is a comfortable temperature for US stocks" and for the Japanese stock market, he said.

The United States and Mexico reached a last-minute deal Friday to crack down on migration from Central America, with Donald Trump relenting on threats to slap potentially devastating tariffs on the neighbouring country from Monday.

"The last-minute avoidance of tariffs on Mexican goods is encouraging investors" to keep buying on Monday, Kubota also said.

The dollar fetched 108.63 yen in Asian afternoon trade, against 108.15 yen in New York on Friday.

In Tokyo, bluechip exporters were generally higher, with Toyota gaining 1.79 per cent to 6,706 yen and Honda gaining 1.53 per cent to 2,780 yen.

Nissan was up 0.84 per cent at 767.4 per cent after it confirmed its French partner Renault has warned it will block Nissan's plan to overhaul its governance structure.

Sony rallied 2.50 per cent to 5,360 yen and industrial robot maker Fanuc was up 1.87 per cent at 19,260 yen.

AFP