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Shadow of China looms as Japan enters earnings season

Stock prices hold firm after Nidec downgrade, but market braces for more bad news

Investors shrugged off an earnings downgrade by Nidec, sending Tokyo stocks higher on Jan. 18.

TOKYO -- Japanese stocks rebounded on Friday, defying fears of Nidec's earnings downgrade fueling a broad sell-off, but a possible easing of trade tensions between Beijing and Washington has not dispelled China-related worries looming over the upcoming earnings season.

Asian equities markets followed American stocks higher after The Wall Street Journal reported that U.S. Treasury Secretary Steven Mnuchin had proposed scaling back tariffs on Chinese goods to help move trade talks forward. The Nikkei Stock Average rose 1.29%, erasing two days of losses, to close at 20,666 -- its highest point in nearly a month. In China, the Shanghai Composite Index climbed more than 1%.

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