Stocks lost ground on the Tokyo Stock Exchange Wednesday, battered by overnight falls in U.S. and European equities due to growing worries about an escalation of trade tensions between the United States and the European Union.
The 225-issue Nikkei average lost 115.02 points, or 0.53 percent, to end at 21,687.57, after gaining 40.94 points on Tuesday.
The TOPIX index of all first-section issues finished down 11.10 points, or 0.69 percent, at 1,607.66. It fell 1.38 points the previous day.
The Nikkei average gave up over 230 points as soon as the opening bell rang, as sell orders had piled up after the administration of U.S. President Donald Trump threatened Tuesday to impose additional tariffs on European imports as retaliation for subsidies to Airbus SAS. The EU promptly responded, saying it is readying a list of tariffs to counter subsidies to Boeing Corp.
The Tokyo market was also dampened by the yen’s strengthening against the dollar and other major currencies in the wake of the International Monetary Fund’s downward revision in its World Economic Outlook, market sources said.
Stocks cut some of the initial losses after the wave of selling. But both Nikkei and TOPIX indexes remained in negative territory throughout Wednesday’s session.
“Investors backed off as they were reminded of the existence of confrontation between the United States and the EU, which they had forgotten,” said Hideyuki Suzuki of SBI Securities Co.
Suzuki also noted that players have begun bracing for the upcoming 10-day holiday from April 27 in Japan by holding in check active buying of declined shares.
Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., attributed Wednesday’s drop to futures-linked selling. He also said trading volume was relatively low before a spate of earnings announcements by Japanese firms later this month.
Falling issues far outnumbered rising ones 1,572 to 485 in the TSE’s first section, while 83 issues were unchanged.
Volume inched up to 1.12 billion shares from Tuesday’s 1.10 billion shares.
Japan Post Holdings sagged 2.88 percent after the Finance Ministry started preparations for releasing part of its shareholdings in the company as early as September.
Technology giant Sony, pharmaceutical firm Astellas and chipmaking gear manufacturer Tokyo Electron were among other major losers.
By contrast, Suruga Bank shot up 16.25 percent on a media report that it is in talks with electronics retailer Nojima, bank group Resona Holdings and other two firms for financial assistance.
Also on the sunny side were technology investor SoftBank Group, optical equipment maker Olympus and clothing store chain Fast Retailing.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average shed 40 points to end at 21,700.