Business / Financial Markets | TSE DATA & REPORT

Tokyo Stocks drop on weak yuan, unstable Shanghai market

JIJI

Stocks lost some ground Tuesday, hurt by the yuan’s weakness against the dollar and instability of Shanghai stocks.

The Nikkei 225 average edged 26.39 points, or 0.12 percent, lower to close at 21,785.54 after plunging 492.58 points Monday.

The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 2.49 points, or 0.15 percent, lower at 1,692.80 after shedding 35.60 points Monday.

The TSE opened higher following a rise in U.S. equities overnight, with the Nikkei briefly gaining over 100 points in the morning after Monday’s sharp loss.

But both indexes lost steam in midmorning trading, pressured by a drop in Shanghai stocks and futures-led selling.

The Nikkei and Topix recouped much of the losses toward the close thanks to buybacks following a recovery of Shanghai stocks, brokers said.

Persistent concerns over U.S.-China trade friction was behind the yuan’s fall against the dollar and the drop in Shanghai stocks, said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

“It’s difficult for investors to boost buying unless this (trade) issue is resolved,” an official of a bank-affiliated securities firm said.

U.S. investors refrained from active buying ahead of the Independence Day holiday on Wednesday, the official said.

Tokyo stocks can fall further amid the U.S.-China trade dispute, an official of a major securities firm said.

Falling issues far outnumbered rising ones 1,541 to 486 in the first section, while 69 issues were unchanged.

Volume increased to 1.484 billion shares from 1.372 billion Monday.

Nonferrous metal names met with selling due to growing concerns over the Chinese economy stemming from the U.S.-China trade friction. They included Mitsubishi Materials and Toho Zinc.

Canon slumped 2.01 percent a day after SMBC Nikko Securities Inc. lowered its stock target price for the camera maker, brokers said.

Among other major losers were Sumitomo Metal Mining and shipping firm Nippon Yusen.

Meanwhile, Seiko Epson gained 2.02 percent after Goldman Sachs Japan Co. revised up its investment rating for the printer maker on Monday, market sources said.

Also on the plus side were electronics firm Fujitsu and office equipment manufacturer Ricoh.

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