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Stocks fall back on heightened U.S.-North Korea tensions

JIJI

Stocks fell back on the Tokyo Stock Exchange Tuesday, with investors caught in a risk-averse mood amid heightened tensions between the United States and North Korea.

The benchmark Nikkei 225 average lost 67.39 points, or 0.33 percent, to close at 20,330.19. On Monday, the key market gauge rose 101.13 points.

The Topix, including all first-section issues, finished down 0.08 point, or 0.00 percent, at 1,672.74, after gaining 8.21 points the previous day.

Tokyo stocks were weighed down by the yen’s firming against the dollar and an overnight sell-off on Wall Street both triggered by North Korean Foreign Minister Ri Yong Ho’s remark that the United States declared war against his country.

Reacting harshly to U.S. President Donald Trump’s recent tweet saying North Korea “won’t be around much longer,” Ho told reporters in New York that Trump “declared a war on our country” and that Pyongyang “has the right to shoot down U.S. bombers” even before they enter North Korean skies. The United States later explained that Trump’s remark was not meant to declare war.

After the early selling subsided, however, the market showed some resilience in the morning.

Investors stepped up buying to secure the right to obtain interim dividends ahead of the end of the fiscal first half on Saturday, brokers said.

The market saw selling pressure grow again in the afternoon.

Besides the increased tensions over North Korea, an official of a bank-affiliated securities company cited invigorated profit-taking activities following the recent rally as a reason for the day’s drop.

Masayuki Otani, chief market analyst at Securities Japan Inc., pointed out that a large portion of the Nikkei average’s loss can be attributed to “falls in technology names prompted by plunges of their U.S. peers, particularly parts suppliers for Apple Inc.”

“Unless the yen strengthens further against the dollar, the Tokyo market may turn higher (later this week),” Otani added.

Players were keenly waiting for the release later in the day of the Conference Board’s U.S. consumer confidence index for September, the security firm official said.

Rising issues outnumbered falling ones 1,189 to 732 on the TSE’s first section, while 107 issues were unchanged.

Volume rose to 1.780 billion shares, from Monday’s 1.529 billion shares.

Electronic parts suppliers Nitto Denko, Murata Manufacturing, Taiyo Yuden and Foster Electric were downbeat affected by speculation about sluggish sales of Apple’s next smartphone iPhone X.

Other technology names such as Sony, Renesas Electronics and MinebeaMitsumi also met with selling.

By contrast, airlines JAL and ANA rose on dividend-seeking buying along with railway operators JR Tokai and Keisei

Oil companies Inpex, Japex and Cosmo Energy advanced on the back of higher crude oil prices.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 120 points to 20,150.