Stocks fell for the first time in four trading sessions on the Tokyo Stock Exchange on Wednesday, hurt by an overnight loss in U.S. equities and lingering concerns over an uncertain future in the U.S.-China trade dispute.
The 225-issue Nikkei average dropped 74.56 points, or 0.35 percent, to end at 21,129.72, after advancing 69.86 points Tuesday.
The Topix index of all first section issues finished down 7.10 points, or 0.45 percent, at 1,554.22. It gained 8.38 points the previous day.
The market started lower, battered by the drop on Wall Street.
The Nikkei soon recovered to the sunny side, thanks to buybacks, mainly of machinery-related stocks. Brokers said that investors bought back such stocks after the Cabinet Office announced Wednesday morning that Japan’s seasonally adjusted core machinery orders in April rose 5.2 percent from the previous month.
The index, however, failed to extend gains and moved sluggishly around Tuesday’s closing level before slowly slipping deeper into negative territory in afternoon trading.
The Topix cut early losses and climbed up into positive territory in midmorning trading, but it soon fell into the minus side.
Brokers said that the market was weighed down by uncertainties over the future of the U.S.-China trade war, after U.S. President Donald Trump threatened Monday that his country will impose tariffs on China if Chinese President Xi Jinping does not meet him during a Group of 20 summit in Japan.
An official of a bank-affiliated securities firm noted that the topside of the market was limited by concerns over the negative effects on the Japanese machinery industry of the trade dispute. Machinery orders data released in the morning were for April, not May, when the trade conflict intensified.
Weak Shanghai stocks also hurt Tokyo market sentiment, brokers said.
On the other hand, the market was supported by buybacks, they said.
Investors avoided active buying and selling in the afternoon amid a dearth of new trading incentives, leaving market activity slow, brokers said.
Noting that the Chinese government has remained silent on Trump’s statement, Yoshihiko Tabei, chief analyst at Naito Securities Co., said, “There are no strong buying incentives as there is no progress in U.S.-China talks to resolve their trade war.”
Falling issues outnumbered rising ones 1,329 to 717 in the TSE’s first section, while 95 issues were unchanged.
Volume increased to 1.056 billion shares from Tuesday’s 1.002 billion shares.
Technology investor SoftBank Group Corp. dropped 2.4 percent after a group of U.S. state attorneys general filed a lawsuit to block a planned merger of fourth-ranking U.S. mobile phone carrier Sprint Corp., which is affiliated with SoftBank, and third-ranking T-Mobile US Inc.
Other major losers included industrial robot producer Yaskawa Electric Corp. and supermarket chain Kobe Bussan Co.
By contrast, trading house Itochu Corp. closed up 2.14 percent, in response to its announcement on Wednesday of its plan to buy back its own shares.
Among other major winners were clothing store chain Fast Retailing Co. and automotive goods retailer Autobacs Seven Co.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average lost 90 points to end at 21,120.
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