Stocks turned sharply lower Monday, with investors becoming cautious again over the course of U.S.-China trade friction.
The key Nikkei 225 fell 344.67 points, or 1.55 percent, to end at 21,898.99. It jumped 556.01 points Friday. The Nikkei fell below 22,000 on a closing basis after retaking the key threshold Friday for the first time in seven market days.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, closed 18.37 points, or 1.11 percent, down at 1,640.39. It gained 26.71 points Friday.
The market came under heavy selling pressure after U.S. National Economic Council Director Larry Kudlow denied a media report Friday that Donald Trump had asked senior officials of his administration to draft a possible deal with China on trade.
Also, massive selling of Fast Retailing, a heavyweight Nikkei 225 component, helped send the key yardstick sharply lower, market sources said. The clothing chain operator was sold after the company reported Friday a 10.0 percent year-on-year fall in same-store sales at its flagship Uniqlo stores for October.
Following Kudlow’s denial of the media report, market participants “have begun to have doubts about whether they can be optimistic” over the U.S.-China dispute, Yoshihiko Tabei, chief analyst at Naito Securities Co., said.
A wide range of issues posted losses amid the rekindled worries about trade tensions between the world’s biggest and second-biggest economies, an official of a bank-linked securities firm noted.
Shanghai stocks’ sluggish performance Monday battered investor sentiment in the Tokyo market, Hiroaki Kuramochi, chief market analyst at Saxo Bank Securities Ltd., pointed out.
“Buying was held in check ahead of the U.S. midterm elections” Tuesday, he also said.
Falling issues overwhelmed rising ones 1,372 to 656 on the first section, while 83 issues were unchanged.
Volume dropped to 1.489 billion shares from 1.818 billion Friday.
Fast Retailing closed 4.76 percent lower following the announcement of the weaker October sales at the Uniqlo brand.
Hitachi Chemical was downbeat after unveiling on Friday the discovery of additional cases of product quality inspection fraud.
System integration service provider NTT Data and drugmaker Astellas were among other major losers.
By contrast, apparel shop operator Adastria was upbeat after reporting Friday that its sales in October rose 2.4 percent from the year before on a same-store basis.
Also on the plus side were mobile phone carrier SoftBank Group and beverage bottler Sapporo Holdings.