Business / Financial Markets | TSE DATA & REPORT

Nikkei sinks to two-month low on continued U.S.-China trade concerns

JIJI

Stocks dived Tuesday, suffering from an overnight sell-off on Wall Street and the yen’s strengthening against the dollar.

The Nikkei 225 average gave up 229.38 points, or 1.11 percent, to end at 20,455.44. On Friday, the key market gauge added 91.47 points. The Tokyo Stock Exchange was closed Monday for Mountain Day.

The Topix, which covers all first-section issues on the TSE, finished 17.27 points, or 1.15 percent, lower at 1,486.57 after advancing 5.18 points Friday.

Stocks bled from the outset, with the Nikkei expanding losses by more than 300 points soon after the opening bell.

Sell orders piled up in the wake of the Dow Jones Industrial Average plunging on the New York Stock Exchange on Monday on broad-based selling triggered by President Donald Trump’s remarks Friday indicating that Washington is not ready to make a trade deal with Beijing, brokers said.

In addition to the growing concerns over a prolonged U.S.-China trade war, geopolitical risks, such as turmoil in Hong Kong, and the yen’s advance against the dollar weighed down the TSE, they noted.

But after the early morning tumble, stocks resisted falling further due to a halt in the yen’s appreciation, going sideways for the rest of the session amid a dearth of fresh trading incentives.

The market was underpinned in the afternoon by “apparent purchases of exchange-traded funds by the Bank of Japan,” Yutaka Miura, senior technical analyst at Mizuho Securities Co., said.

But there was no follow-through buying because of the lack of fresh positive news, Miura noted, adding there were no cues for active selling.

Falling issues far outnumbered rising ones 1,655 to 444 in the first section, while 50 issues were unchanged.

Volume rose to 1.282 billion shares from 1.185 billion Friday.

Financials, such as mega-bank Sumitomo Mitsui Financial Group Inc. and insurer Dai-ichi Life Holdings Inc., lost ground in response to a drop in U.S. long-term interest rates amid the heightened trade war concerns.

Automakers including Mazda and Honda were sold along with other export-oriented issues on the back of the yen’s rise against the dollar.

Job information service firm Recruit Holdings Co. and Toppan Printing Co. went down after their April-June operating profits failed to beat market consensuses.

On the other hand, confectionery maker Morinaga & Co. soared 5.37 percent thanks to brisk earnings for April-June.

Also on the sunny side were drugmaker Daiichi Sankyo Co. and advertising giant Dentsu Inc.