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Nikkei closes down nearly 1,000 points on trade war jitters

JIJI

Stocks nose-dived on the Tokyo Stock Exchange Friday due to intensifying concerns over a trade war between the United States and China, with the benchmark 225-issue Nikkei average finishing with a loss of nearly 1,000 points.

At the close, the Nikkei was down 974.13 points, or 4.51 percent, at 20,617.86, for its weakest finish since Oct. 3, 2017. It rose 211.02 points Thursday.

The Nikkei plunged some 1,032 points shortly before the close, as the market accelerated its downswing in the face of selling, apparently by European traders.

The Topix index of all first-section issues ended down 62.45 points, or 3.62 percent, at 1,664.94, the lowest since Sept. 27 last year, after gaining 11.10 points Thursday.

The market met with heavy selling from the outset of Friday’s trading, after U.S. equities plummeted Thursday on worries about an escalation in the U.S.-China trade friction, brokers said.

Concerns grew because U.S. President Donald Trump on Thursday signed an order for trade retaliation against China’s intellectual property violations. The Trump administration is expected to impose 25 percent tariffs on Chinese products worth up to $60 billion a year.

Investor sentiment was also dampened by the dollar’s first fall below ¥105 since November 2016, market players said.

Market players “sold stocks on concerns over a possible global recession that could be triggered by the U.S.-China trade friction,” Yutaka Miura, senior technical analyst at Mizuho Securities Co., said.

Yoshihiko Tabei, chief analyst at Naito Securities Co., said that the Tokyo market’s massive loss came as the dollar’s fall below ¥105 reduced “hopes for brisk earnings (at Japanese firms).”

The market was hit by position-adjustment selling ahead of the weekend, he also said.

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., noted that program selling pushed down the market further in the afternoon.

Falling issues overwhelmed rising ones 2,042 to 29 on the TSE’s first section, while nine issues were unchanged.

Volume grew to 1.914 billion shares from Thursday’s 1.385 billion shares.

The stronger yen battered export-oriented names, including automaker Toyota Motor Corp., chip-making equipment maker Tokyo Electron Ltd., and industrial equipment manufacturers Yaskawa Electric Corp. and Fanuc Corp.

Construction machinery firms Komatsu Equipment Co., Hitachi Construction Machinery Co. and Kubota Corp. were also downbeat, following U.S. giant Caterpillar’s tumble on the New York market Thursday.

Oil companies JXTG Holdings Inc., Showa Shell Sekiyu KK, Idemitsu Kosan Co. and Cosmo Energy Holdings Co. ceded ground, affected by a fallback in U.S. crude oil futures prices Thursday.

Financials, including megabank groups Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, and insurers Dai-ichi Life Holdings Inc. and Tokio Marine Holdings Inc., were sold after U.S. peers fared poorly Thursday.

Other major losers included clothing retailer Fast Retailing Co. and mobile phone carrier SoftBank Group Corp.

Japan Tobacco Inc. and Kansai Electric Power Co. were among the handful of winners.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average was down 1,030 points at 20,350.