Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks fall on U.S.-China trade jitters

JIJI

Stocks fell on the Tokyo Stock Exchange on Wednesday, reflecting a further escalation in U.S.-China trade friction.

The 225-issue Nikkei average plunged 264.68 points, or 1.19 percent, to close at 21,932.21, after rising 144.71 points on Tuesday.

The Topix index of all first-section issues was down 14.25 points, or 0.83 percent, at 1,701.88. It gained 4.34 points the previous day.

Both indexes dropped for the first time in four trading days.

The market came under heavy selling pressure from the start of Wednesday’s session, after the administration of U.S. President Donald Trump announced on Tuesday a decision to start procedures for imposing an additional 10 percent tariffs on $200 billion worth of Chinese products in new trade sanctions on the Asian giant.

Investor concerns over the trade confrontation between the world’s two largest economies caused the Nikkei to lose over 450 points briefly in the morning session.

But stocks recouped some of the early losses later, supported by a bout of buybacks, market sources said.

The market’s heavy losses in the morning came as the fresh U.S. measure against China was announced “earlier than expected,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co.

“Selling hit economically sensitive stocks,” an official of a bank-affiliated securities firm said, indicating that worries about a potential recession from the fierce U.S.-China trade row battered such cyclical stocks.

An official of a midsize securities firm said he believes Wednesday’s losses were driven by futures-led selling from speculators.

The market attracted buybacks in the afternoon partly because investor sentiment was supported by the dollar’s rebound above ¥111, Ichikawa said.

Falling issues far outnumbered rising ones 1,563 to 485 on the TSE’s first section, while 51 issues were unchanged.

Volume dropped to 1.37 billion shares from 1.52 billion shares Tuesday.

Restaurant operator Saizeriya fell 6.39 percent as its consolidated operating profit in the nine months through May, announced on Tuesday, tumbled 20.1 percent from a year earlier to ¥6.42 billion, brokers said.

Clothing retailer Fast Retailing and technology firms Kyocera and TDK were also in the red.

By contrast, consumer electronics retailer Bic Camera rose 6.55 percent after announcing strong earnings Tuesday for the nine-month period to May. Its group operating and net profits jumped 38.4 percent and 32.7 percent, respectively, from a year before.

Other major winners included oil wholesaler Showa Shell Sekiyu and cosmetics-maker Shiseido.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average plummeted 280 points to 21,910.