Stocks suffered a sell-off Tuesday, the first of trading in the new Reiwa Era and after an unprecedented 10-day break, with sentiment battered by rekindled fears of a U.S.-China trade war.
The Nikkei 225 average closed at 21,923.72, down 335.01 points, or 1.51 percent, from April 26, the final trading day before the start of Golden Week. On April 26, the Nikkei fell 48.85 points.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 18.09 points, or 1.12 percent, lower at 1,599.84 after losing 2.35 points April 26.
The market met with risk-averse selling from the outset Tuesday, following an overnight tumble on Wall Street stemming from U.S. President Donald Trump’s tweets threatening to raise tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent, brokers said.
Both the Nikkei and Topix showed some resilience late in the morning, helped by a rally in Shanghai stocks. But they went south in the afternoon, weighed by drops in U.S. stock index futures in off-hours trading.
Hit by a Chinese media report that Beijing may suspend trade talks with Washington, the market saw its loss expand in late afternoon trading, brokers said.
Besides the negative surprise by Trump, weaker than expected earnings announced by Japanese firms before the long holiday contributed to the dive, said Yoshihiko Tabei, chief analyst at Naito Securities Co.
The yen’s appreciation against the dollar also dampened export-oriented stocks, brokers said.
“The market’s direction would be determined by developments related to U.S.-China trade negotiations,” said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc. China and the U.S. are scheduled to start ministerial-level talks in Washington on Wednesday.
Falling issues outnumbered rising ones 1,457 to 623 in the first section, while 60 issues were unchanged.
Volume increased to 1.564 billion shares, from 1.318 billion April 26.
China-linked shares were shunned, including electronic parts supplier Murata Manufacturing, construction machinery maker Komatsu and industrial robot producer Fanuc.
Chipmaking gear manufacturer Tokyo Electron and wafer maker Shin-Etsu Chemical fell for failing to meet market consensuses on their respective operating profit projections for the year through next March.
Among other losers were clothing store chain Fast Retailing and automaker Toyota.
Meanwhile, defensives attracted purchases amid a heightened risk-off mood. They included cosmetics maker Shiseido, pharmaceutical firm Daiichi Sankyo and daily goods producer Kao.
Airline JAL rose after announcing a share buyback plan.
Also on the sunny side were mobile phone carrier KDDI and technology giant Sony.