By Lucy Craymer
But steel stocks hurt by U.S. tariff announcement
Japanese and South Korean stocks rose sharply Friday morning, leading gains across Asia-Pacific, on news that North Korean leader Kim Jong Un and President Donald Trump agreed to meet by May.
The news, announced early in Asian trading, followed an invitation in a letter from Kim that was delivered to the White House by South Korea's national-security adviser. Kim also reaffirmed that he was prepared to suspend nuclear and missile tests while North Korea engages in talks on the denuclearization of the Korean Peninsula.
"Any moves to dampen what has been seen as a political hot spot can only be seen as a good thing," said Stuart Ive, senior client adviser at OM Financial in Wellington, New Zealand. However, he noted there might be some skepticism in the market as "we've seen this all before."
Supported by the boost in risk appetite, Japan's Nikkei Stock Average jumped 2.3% and South Korea's Kospi climbed 1.8%. Equities elsewhere in the region were up no more than 0.5%.
The one soft spot in both Japan and Korea was steel stocks, hit by confirmation Thursday that the U.S. will levy tariffs on steel and aluminum. Korea's Posco (PKX) , Hyundai Steel (004020.SE) and Dongkuk Steel (PKX) fell as much as 2% while Japan's Kobe Steel (5406.TO) fell 1.5%.
However, analysts say news of tariffs had less impact than initially feared given that Mexico and Canada were exempted from the levies. U.S. stocks rallied into the close as details were released ahead of the closing bell there.
"The tariffs are not as tight as people had feared," said Michael McCarthy, chief market strategist at CMC Markets. Others could also receive exemptions over time.
The risk-on move also pressured the safe-haven Japanese yen, in the process giving a further boost to Tokyo equities. The dollar was recently up at Yen106.90, versus Yen106.20 in late New York trading, amid broader gains for the greenback. Gold prices eased slightly while the 10-year Treasury yield rose to 2.88% from 2.86%.
S&P 500 futures were up 0.2%.
Midday, some focus will turn to the policy statement from the Bank of Japan after its two-day meeting. No change in course is expected, but traders will be looking for any indication about when the central bank plans to tighten policy.
In commodities, oil futures were up about 0.5% after overnight selling. The U.S. on Wednesday released data showing average daily output last week hit another record high.
(END) Dow Jones Newswires
March 08, 2018 21:30 ET (02:30 GMT)