Stocks turned sharply lower on the Tokyo Stock Exchange Wednesday, falling prey to profit-taking prompted by drops in overseas markets amid rekindled concerns over a trade war between the United States and China.
The 225-issue Nikkei average fell 187.78 points, or 0.86 percent, to end at 21,521.53, after rising 92.51 points on Tuesday.
The Topix index of all first-section issues closed down 10.44 points, or 0.66 percent, at 1,565.14. It advanced 7.01 points the previous day.
The Tokyo market tumbled right after the opening bell, as investors rushed to lock in gains in the previous day’s rally in view of overnight drops in European and U.S. shares following U.S. President Donald Trump’s Twitter feed blaming China for not having bought American farm products yet.
U.S.-China trade negotiations resumed in Shanghai on Tuesday, but Trump has refueled concerns that the two economies would fail to strike a deal to settle their dispute, brokers said.
Stocks bowed further to selling in the morning due also to sluggish performances of Shanghai and Hong Kong equities.
After exhibiting some resilience thanks to buybacks and a rise in U.S. Dow Jones industrial average futures in off-hours trading, the market went sideway in the afternoon with participants coming to sit on the fences to wait for the outcome of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting through Wednesday, brokers said.
An asset management firm official pointed out that market attention was on whether the Fed would hint at the possibility of further easing in a statement to be issued after the policy-setting meeting, where the U.S. central bank was widely expected to decide to cut its policy interest rates by 0.25 percentage point.
Meanwhile, Hiroaki Hiwada, strategist at Toyo Securities Co., said, “Investors were waiting for financial statements by Murata Manufacturing, Panasonic and other China-linked Japanese firms to see how the U.S.-China trade conflict affected their earnings.”
Falling issues outnumbered rising ones 1,525 to 547 in the TSE’s first section, while 78 issues were unchanged.
Volume increased to 13.5 billion shares from Tuesday’s 11.4 billion shares.
Camera maker Konica Minolta dived 11.39 percent and game maker Nintendo 1.21 percent, after their earnings failed to beat market consensuses.
Among other major losers were auto parts maker Aisin Seiki and housing supplier Daito Trust Construction.
By contrast, technology giant Sony rose 5.31 percent, thanks to its better-than-expected operating profit.
Other major winners included online fashion mall operator Zozo and drug maker Daiichi Sankyo.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average shed 110 points to end at 21,550.