* Machinery companies with high exposure to China soar
* Renesas jumps 11 pct; report quotes chief on self-driving ambition
By Ayai Tomisawa
TOKYO, Dec 3 (Reuters) - Japan’s Nikkei surged to a seven-week high on Monday morning after the United States and China on the weekend suspended new tariffs and agreed to try reaching a trade deal within 90 days, which lifted global cyclical stocks.
The Nikkei share average soared 1.4 percent to 22,647.29 in mid-morning trade, after touching 22,677.29, the highest level since Oct. 18.
The White House said President Donald Trump told China’s President Xi Jinping at the G20 talks in Argentina that he would not boost tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1, as previously planned.
Japanese cyclical stocks such as those in tech, autos and machinery that have large exposure to the Chinese market outperformed.
Hitachi Ltd and TDK Corp surged 5 percent, and Toyota Motor Corp advanced 3.5 percent. Honda Motor added 2 percent, Fanuc Corp 2.5 percent and Yaskawa Electric 3.1 percent.
The U.S.-China truce “is raising investors’ risk appetite especially on stocks that have underperformed lately,” said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management.
“In the mid-term, there are concerns that new tariffs will start after 90 days, but the market also expects China to come up with a stimulus programme before then.”
Apart from trade, Shigemi said that investors have taken heart from comments by U.S. Federal Reserve Chair Jerome Powell as hinting at a slower pace of rate hikes.
“Investors were concerned about trade and Fed’s policy, so right now with the two major worries receding, the environment is favourable for stocks now,” Shigemi said.
Renesas Electronics, which has deepened a push into semiconductors for self-driving cars, jumped 11 percent. Nikkei Electronics quoted President Bunsei Kure as saying it will strive to stay on top in the self-driving field.
The broader Topix rose 1.6 percent to 1,693.29. (Editing by Richard Borsuk)