Rising concerns about a possible escalation in the trade war between the United States and China led to another sell-off on the Tokyo Stock Exchange on Thursday.
The 225-issue Nikkei average fell another 200.46 points, or 0.93 percent, to end at 21,402.13, after sliding 321.13 points on Wednesday. It was the key market yardstick’s first finish below 21,500 since March 29.
The Topix index of all first-section issues closed down 21.62 points, or 1.38 percent, at 1,550.71. It plunged 27.51 points the previous day.
The market took a dive right after the opening bell, as investors rushed to sell in the wake of the Office of the U.S. Trade Representative’s posting of a notice to the Federal Register that the United States will raise tariffs on Chinese products worth $200 billion from 10 percent to 25 percent on Friday. In a quick response, Beijing said it was ready to retaliate.
Stocks accelerated their downswings later in the morning, with investor sentiment further dampened by U.S. President Donald Trump’s reported comment that China “broke the deal.”
In the afternoon, however, the market showed some resilience, aided by buybacks, brokers said.
Investors refrained from buying because of the difficulty in predicting the outcome of the ministerial-level negotiations expected to start in Washington on Thursday, brokers said.
“The Tokyo market may show wild swings on Friday too, depending on what will happen in the trade talks,” said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.
If the talks break down and the tariffs are actually raised, the Nikkei could fall below 21,000, Fujii said. But he added the index might rebound sharply to 22,000 if some sort of agreement is struck.
Falling issues trounced rising ones 1,819 to 282 in the TSE’s first section, while 39 issues were unchanged.
Volume rose to 1.689 billion shares from Wednesday’s 1.496 billion shares.
The broad-based market plunge was also traced to a stronger yen and share price drops stemming from poor earnings reports. Losing issues included Ono Pharmaceutical and automaker Honda.
Among other noticeable losers were industrial robot producer Fanuc and drug maker Daiichi Sankyo.
On the other hand, telecommunications carrier SoftBank attracted purchases on rosy earnings forecasts for the year through March and plans to boost dividend.
Clothing store chain Fast Retailing and trader Mitsubishi enjoyed sound gains on selective buying while many other retailers and trading firms were downbeat.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average lost 200 points to end at 21,380.