Headline indices of the Japan share market spurted on Monday, 1 July 2019, on relief rally after the United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing. China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table. All 33 subsectors of the Topix's index inclined, with Marine Transportation, Metal Products, Electric Appliances, Machinery, and Pharmaceutical issues being notable gainers. At closing bell, the 225-issue Nikkei Stock Average surged 2.13%, or 454.05 points, to 21,729.97, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose by 2.17%, or 33.71 points, at 1,584.85.

U.S. President Donald Trump and Chinese President Xi Jinping emerged from a meeting on the sidelines of the Group of 20 summit in Osaka, Japan, where both sides confirmed that they did not plan to levy any new tariffs against each other's products at the present time.

After a highly anticipated meeting on the sidelines of the G20 summit Saturday, the US president said negotiations to resolve the standoff between the world's two biggest economies were back on track and threatened new levies on Chinese goods would be held off. Trump also signalled a softer position on Chinese telecom giant Huawei, a major bone of contention in the row, by saying US companies could sell equipment where there's no great national security problem.

Data released Monday from a private survey showed that Chinese factory activity in June shrank unexpectedly. The Caixin/Markit factory Purchasing Managers' Index (PMI) for June was 49.4. A PMI reading above 50 indicates expansion while those below that figure signal contraction. That followed a Sunday official data release that showed Chinese manufacturing activity shrinking more than expected in June. The Purchasing Managers' Index stood at 49.4 in June, according to China's National Bureau of Statistics on Sunday.

ECONOMIC NEWS: Japan Large Manufacturers Confidence Weakens To 3-Year Low In Q2 -- Japan large manufacturers confidence fell to +7 in June quarter from +12 in March quarter, a three-year low as trade wars and weak global demand weighed on economic activity, the latest quarterly Tankan survey from Bank of Japan revealed Monday. The score was forecast to drop moderately to +9. Meanwhile, the non-manufacturing sentiment index rose unexpectedly to +23 from +21 a quarter ago. Consequently, the all industry sentiment index came in at +10 versus +12 in the previous quarter.

Japan manufacturing conditions deteriorate in June -- For the second month in a row, Japan's manufacturing conditions deteriorated thanks to the slowdown in global trade volumes and weaker overseas demand conditions. The headline Jibun Bank Japan Manufacturing PMI was down to 49.3 from 49.8 in May, it's lowest since March. Lower production volumes and another decrease in new work were the main factors holding back the headline PMI in June. Latest data indicated the sharpest fall in output since March. Moreover, production volumes have now fallen for six months in a row, which is the longest period of decline since 2012-13.

CURRENCY NEWS: Japanese yen, often seen as a safe-haven currency, depreciated against greenback on Monday. The Japanese yen, viewed as a safe-haven currency, weakened to 108.27 against the dollar after trading below 107.0 last week.