TOKYO, Oct 29 ― Tokyo shares surged to the highest close in a year today, lifted by optimism about US-China trade talks and the yen's relative stability.

The benchmark Nikkei index marked seven straight winning sessions, adding 0.47 per cent or 106.86 points to 22,974.13, its highest finish since October 10, 2018.

The broader Topix index rose 0.86 per cent or 14.25 points to 1,662.68.

Investors cheered US President Donald Trump's announcement that talks for "phase one” of a China trade deal were "ahead of schedule,” prompting US shares to surge.

"Having seen the rises of the three major US indices overnight, the Nikkei started the day in positive territory,” Okasan Online Securities said in a note.

"Hopes for progress in US-China talks as well as the stable forex market helped to lift the Nikkei index,” Okasan said.

The dollar stood at ¥108.97 (RM4.18), nearly flat from ¥108.95 in New York yesterday afternoon.

The global market was becoming "risk-on”, said SMBC Nikko Securities.

But investors did not aggressively push up the Nikkei index, and recent gains in Tokyo encouraged profit-taking, Okasan added.

Toward the end of the session, investors began to take a wait-and-see stance ahead of the US Federal Reserve's two-day policy meeting, which will finish Wednesday, Okasan added.

Airline operator ANA Holdings ended down 0.54 per cent at ¥3,694 after the leading business daily Nikkei reported its operating profit for the first half to September likely dropped by about 20 per cent year-on-year.

After the market closed, the company announced a 25 per cent drop of its six-month operating profit to ¥78.88 billion due to rising costs.

Its net profit fell 23.0 per cent to ¥56.79 billion, on sales of ¥1.05 trillion, a rise of 1.1 per cent.

Among other major shares, game maker Nintendo surged 2.08 per cent to ¥37,790, while Sony added 1.13 per cent to ¥6,442.

Mitsubishi UFJ Financial Group added 1.78 per cent to ¥576.5. Toyota added 0.84 per cent to ¥7,546. ― AFP