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Japanese stocks end at 5-1/2-week high on global stimulus hopes

Published 2019/09/09, 08:26
Updated 2019/09/09, 08:30
© Reuters.  Japanese stocks end at 5-1/2-week high on global stimulus hopes

By Tomo Uetake

TOKYO, Sept 9 (Reuters) - Japanese shares hit a 5-1/2-week closing high on Monday, supported by hopes that stimulus from the world's largest economies would help stave off a global recession.

The benchmark Nikkei average .N225 ended 0.56% firmer at 21,318.42, while the broader Topix .TOPX rose 0.91% to 1,551.11 - their highest closing levels since Aug. 2.

"Three big worries for financial markets - namely, the U.S.-China trade war, Brexit jitters and Hong Kong protests - have retreated and contributed to the risk-on sentiment," said Masayuki Kubota, chief strategist, Rakuten Securities.

Global equity markets received a lift after China's central bank said on Friday it was cutting the amount of cash that banks must hold as reserves, releasing liquidity to shore up a slowing economy dragged down by the Sino-U.S. trade war. sentiment also improved as U.S. Federal Reserve Chairman Jerome Powell said on Friday that the central bank will continue to act "as appropriate" to sustain the economic expansion in the world's biggest economy. broader stock market gains were tempered in the wake of lacklustre economic data - U.S. job growth slowed more than expected in August, while earlier on Monday data showed Japan's economy grew at a slower pace than initially estimated in the second quarter. of Tokyo's 33 sub-sectors ended in positive territory, with oil and coal products .IPETE.T and construction stocks .ICNST.T among the top performing sectors, up 1.6% and 1.5%, respectively.

Elsewhere, regional bank shares rallied broadly, buoyed by growing speculation of further consolidation in the industry after SBI Holdings and Shimane Bank announced a capital tie-up plan on Friday. Bank 8338.T ended 9.8% firmer, Tochigi Bank 8550.T soared 9.2% and Bank of Kochi Ltd 8416.T advanced 4.6%, while Shimane Bank 7150.T , which jumped by daily limit of 16.4% in the previous session, added 1.6%. SBI Holdings 8473.T closed 1.2% higher.

Bucking the broad market trend, Nissan Motor 7201.T dipped 0.2% after the Nikkei newspaper reported Chief Executive Hiroto Saikawa as saying he wanted to "pass the baton" to the next generation as soon as possible. source told Reuters the carmaker's nominating committee will discuss Saikawa's resignation and possible successors on Monday.

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