Tokyo stocks open higher as trade worries ease

Tokyo stocks opened higher on Tuesday as trade worries receded after the United States and Mexico announced a breakthrough deal to rewrite a North American trade pact.

The benchmark Nikkei 225 index was up 0.69 per cent or 157.07 points at 22,956.71 in early trade while the broader Topix index rose 0.69 per cent or 11.88 points at 1,740.83.

US President Donald Trump and outgoing Mexican President Enrique Pena Nieto hailed the new trade agreement, which raises hopes the North American Free Trade Agreement can be salvaged after Canada rejoins the talks on Tuesday.

The proposed new NAFTA deal includes provisions on auto trade, tougher worker protections and a provision to review the deal every six years.

"Following the overall agreement between the US and Mexico, speculation that the US may reach a deal with China would be a tailwind for Japanese shares," Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.

In Tokyo, Toyota was up 1.79 per cent at 7,091 yen after it confirmed that it will invest about $500 million into Uber as part of a deal to work together on mass-producing self-driving vehicles.

Denso rose 2.05 per cent to 5,376 yen and Aisin Seiki was up 2.35 per cent at 5,210 yen, after the two auto parts companies of Toyota group said they will set up a joint venture with two other smaller firms aimed at developing software for auto driving.

Other automakers were also higher, with Honda gaining 2.45 per cent to 3,418 yen and Nissan advancing 2.16 per cent to 1,061.5 yen in early trade.

Sony was up 1.28 per cent at 6,249 yen and Panasonic was up 0.92 per cent at 1,349.5 yen.

On Wall Street, the Dow closed up one per cent at 26,049.64.

The dollar fetched 111.14 yen in early Asian trade, up modestly from 111.07 yen in New York.