Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks turn lower on U.S. political uncertainty

JIJI

Stocks turned lower Wednesday on the Tokyo Stock Exchange as uncertainties grew over the course of U.S. politics following President Donald Trump’s decision to fire the country’s top diplomat.

The 225-issue Nikkei average fell 190.81 points, or 0.87 percent, to end at 21,777.29, after gaining 144.07 points Tuesday.

The Topix index of all first-section issues closed down 7.82 points, or 0.45 percent, at 1,743.21. It climbed 9.73 points the previous day.

Both indexes snapped their four-session winning streak.

The Nikkei average briefly gave up over 280 points in the afternoon after U.S. stocks fell Tuesday due chiefly to Trump’s decision to fire U.S. Secretary of State Rex Tillerson and name U.S. Central Intelligence Agency Director Mike Pompeo to succeed him.

The appointment of Pompeo, known as a hard-liner on trade and North Korea issues, drew concerns over the course of U.S. politics, brokers said.

The Nikkei cut some of its earlier losses later in the afternoon, helped by purchases on decline.

The instability of the Trump administration following a series of resignations of key aides dampened investor sentiment, said Hiroaki Hiwada, strategist at Toyo Securities Co.

Yoshihiko Tabei, chief analyst at Naito Securities Co., said Tillerson’s dismissal “rekindled” geopolitical fears over the Korean Peninsula and worries about intensified trade friction between the United States and other nations, pushing down Japanese share prices.

Stocks bowed to futures-led selling in thin trading, Tabei added.

The market’s downside was underpinned by “bargain hunting for small-cap issues,” an official of a bank-linked securities firm said.

Losers far outnumbered winners 1,262 to 708 in the TSE’s first section, while 100 issues were unchanged.

Volume fell to 1.15 billion shares from Tuesday’s 1.22 million shares.

Tsuruha Holdings Inc. tumbled 7.33 percent as the drug store chain’s operating profit forecast for the year through May, announced Tuesday, failed to meet market consensus, brokers said.

Lower crude oil prices battered such oil companies as Inpex Corp., Cosmo Energy Holdings Co., Showa Shell Sekiyu KK and Japex Co.

Other major losers included chip-making equipment-manufacturer Tokyo Electron Ltd. and clothing-retailer Fast Retailing Co.

By contrast, defense-related Ishikawa Seisakusho Ltd. and Howa Machinery Ltd. attracted purchases as Trump’s selection of Pompeo as the next secretary of state raised concerns over a potential flare-up of tensions involving North Korea, brokers said.