Jiji Press TOKYO (Jiji Press) — Tokyo stocks are expected to remain vulnerable to developments in trade relations between the United States and China this week.
Last week, the 225-issue Nikkei average plunged 913.81 points, or 4.11 percent, to end at 21,344.92 on the Tokyo Stock Exchange.
Concerns over a further escalation in the trade war between the world’s two largest economies mounted after U.S. President Donald Trump threatened to raise tariffs on $200 billion’ worth of Chinese imports from 10 percent to 25 percent.
The tariffs were raised on Friday, after the two countries failed to find a solution to their trade dispute in the first round of two-day ministerial-level negotiations in Washington from Thursday.
This week, the Nikkei is expected to move mainly between 21,000 and 22,000, analysts and brokers said.
“The fate of the Tokyo market will depend on the outcome of the trade talks and Wall Street’s reaction to it,” said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.
If the top negotiators of the two countries strike a deal early, the Nikkei will likely stage a sharp rally, possibly to 22,000, according to Fuji, who did not rule out the possibility of an agreement being reached on Friday. But he quickly added that prolonged negotiations would deter investors from active buying.
Yutaka Miura, senior technical analyst at Mizuho Securities Co., said he expects the market to show “a technical rebound after the tumble last week.”