Tokyo stocks took a downturn Friday after a four-day rally, succumbing to selling pressure built up amid heightened U.S.-China tensions.
The 225-issue Nikkei average on the first section of the Tokyo Stock Exchange fell 38.42 points, or 0.18 percent, to end at 21,877.89, following a 497.08-point surge Thursday.
The Topix index of all first section issues closed down 13.67 points, or 0.87 percent, to 1,563.67, after soaring 27.87 points the previous day.
In view of fallbacks in all three major U.S. stock price gauges including the Dow Jones Industrial Average on Thursday, investors moved to sell Tokyo stocks from the outset.
Worries about further worsening of U.S.-China relations grew after White House economic adviser Larry Kudlow blamed China’s National People’s Congress for approving Beijing’s plan to impose a national security law on Hong Kong, brokers said.
In a CNBC interview, Kudlow said mainland China has “robbed Hong Kong of their freedom” and that Beijing “will be held accountable for that.”
But the market saw some buybacks later, as investors were relieved to find that Chinese stocks were not weaker than expected, brokers said.
The Nikkei popped into positive territory in the afternoon thanks partly to futures-led buying. But it lost steam toward the closing.
“Investors were wary of what U.S. President Donald Trump would say at a press conference later on Friday with regard to the Hong Kong matter,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Attention was focused on whether Trump would announce sanctions against mainland China, he added.
On the TSE first section, falling issues far outnumbered rising ones 1,438 to 674 while 58 issues were unchanged. Volume increased to 2.383 billion shares from Thursday’s 2.087 billion shares.
China-linked issues, such as machinery-maker Komatsu and electronic parts supplier Murata Manufacturing Co., lost ground.
Nissan Motor Co. plunged 10.79 percent, after logging its first group net loss in 11 years on Thursday.
Among other major losers were camera-maker Nikon Corp. and daily goods producer Kao Corp.
On the other hand, drugmaker Otsuka Holdings Co. gained 4.18 percent, thanks to the firm’s better-than-expected operating profit for January-March.
Clothing store chain Fast Retailing Co. and convenience store operator FamilyMart Co. also went up.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average shed 220 points to end 21,810.