Stocks gave up early gains to finish lower for the fifth straight session Friday, hit by speculative selling prompted by U.S. tariff hikes on $200 billion worth of Chinese products.
The 225-issue Nikkei average fell 57.21 points, or 0.27 percent, to end at 21,344.92 on the Tokyo Stock Exchange. On Thursday, the key market gauge dropped 200.46 points.
The Topix index of all first-section issues was down 1.29 points, or 0.08 percent, at 1,549.42, after losing 21.62 points the previous day.
From the outset of Friday’s trading, investors moved to buy back shares battered in recent sell-offs.
Sentiment was brightened by media reports that U.S. President Donald Trump said he received a “beautiful letter” from Chinese President Xi Jinping and could have phone talks with the Chinese leader, brokers said, adding a rebound in Shanghai stocks also provided a buying incentive.
But both the Nikkei and Topix indexes sank into negative territory when a wave of selling by short-term players hit the futures market and pricey cash stocks at around the time the Trump administration carried out the tariff hike, brokers said.
The import duty was raised to 25 percent from 10 percent at 1:01 p.m. Japan time after the United States and China failed to find a solution to their trade dispute in the first round of the two-day ministerial-level negotiations in Washington on Thursday.
Hiroaki Hiwada, strategist at Toyo Securities Co., offered the view that stocks resisted falling substantially.
“The Tokyo market largely priced in the tariff increase” after the Nikkei lost more than 850 points in the three sessions from Tuesday, he pointed out.
Investors took to the sell side in the afternoon, fearing the trade war between the world’s two largest economies would escalate given Beijing’s clear readiness to retaliate, said Hiroaki Kuramochi, chief market analyst at Saxo Bank Securities Ltd.
But the Shanghai market rally suggests that a chance to strike a deal remains, Kuramochi said.
Despite the market indices’ negative finishes, rising issues outnumbered falling ones 1,055 to 1,004 in the TSE’s first section and 81 issues were unchanged.
Volume rose to 1.740 billion shares from Thursday’s 1.689 billion.
Mitsubishi Motors nose-dived as its forecast for operating profit in the business year to March 2020 fell far short of the market consensus.
Panasonic tumbled due to a profit warning for the same business year.
Among other losers were technology investor SoftBank Group and Tokai Carbon.
On the other hand, nonferrous metals producer Mitsui Kinzoku jumped thanks to a rosy projection for operating profit for that year.
Air conditioner maker Daikin attracted purchases to snap a three-session losing streak.
Also on the sunny side were clothing chain operator Fast Retailing and drugmaker Takeda.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average fell 70 points to end at 21,310.