Japan stocks slip to 1-week low on firmer yen, trade war worries

14-Aug-2019 Intellasia | Reuters | 6:02 AM Print This Post

Japanese shares shed more than 1 percent on Tuesday on the first trading day after a long weekend, as a firmer yen and fresh worries about the escalating US-China trade war hit cyclical and exporter firms.

The Nikkei share average fell 1.2 percent to 20,440.51, its lowest level in a week, while the broader Topix lost 1.2 percent to 1,486.62 by the midday break.

As the market re-opened, investors digested news from Tokyo’s long weekend, which had already sent the overseas share markets lower.

US President Donald Trump on Friday said he was not ready to make a deal with China and even called a September round of trade talks into question, reviving concerns on financial markets that the bilateral dispute is unlikely to end anytime soon.

Goldman Sachs Group Inc said on Sunday it no longer expects a trade deal between the world’s largest economies before the 2020 US presidential election.

Of Tokyo’s 33 subindexes, 32 were in the red, with cyclicals such as oil and coal products, rubber products and mining sub-indexes becoming the top three worst performing sectors, down 3.2 percent, 2.8 percent and 2.7 percent, respectively.

The much stronger yen also soured sentiment and dragged down exporters, with Honda Motor dropping 2.6 percent and TDK Corp slipping 3.9 percent.

In the currency market, the yen rose as high as 105.05 yen to the dollar over the long weekend. All else being equal, a stronger yen hurts on Japanese exporters’ profits.

With the busiest part of Japan’s April-June quarter earnings season wrapping up, reaction to earnings continued to dominate trading on Monday.

Bridgestone slid 3.1 percent after the tyre maker forecast full-year net profit through December would fall 1 percent to 290 billion yen ($2.75 billion), down from the previous forecast of 300 billion yen, citing a demand slowdown in North America.

JFE Holdings tumbled 5.6 percent after the steelmaker’s operating profit excluding one-off gains or losses tanked 63 percent in the April-June quarter.

Other notable movers include Japan Display Inc, which nosedived 10.0 percent after the cash-strapped liquid crystal display (LCD) maker for smartphones reported a tenth consecutive quarterly loss and a negative net worth, hit by weak iPhone sales at Apple Inc. ($1 = 105.4300 yen)



Category: Japan

Print This Post