Tokyo stocks close down for third straight session

The Nikkei 225 index lost 0.65 percent, or 134.98 points, to close at 20,585.31. (Shutterstock)
Updated 06 August 2019

Tokyo stocks close down for third straight session

  • The market is expected to be under pressure for now as prospects for the US-China issue remain uncertain
  • The dollar was trading at 106.68 yen in Asia afternoon trade against 105.95 in New York Monday afternoon

TOKYO: Tokyo stocks fell for a third consecutive session Tuesday in volatile trade, plunging nearly three percent at one point over US-China trade war worries but paring losses later in the session.

The Nikkei 225 index lost 0.65 percent, or 134.98 points, to close at 20,585.31 while the broader Topix index was down 0.44 percent, or 6.65 points, at 1,499.23. In early trade, the key Nikkei index dropped more than 2.9 percent after Wall Street suffered its worst session of the year on concerns about an escalating US-China trade dispute.

But Tokyo shares recovered some of their early losses as the sharp fall prompted late bargain-hunting, said Daiwa Securities chief technical analyst Eiji Kinouchi. “However, the late buy back does not mean sentiment improved,” Kinouchi told AFP. “The market is expected to be under pressure for now as prospects for the US-China issue remain uncertain,” he added.

Beijing parried US President Donald Trump’s latest tariff announcements by moving to let the Chinese yuan devalue and halting purchases of US agricultural products. Trump fired back, with Washington formally designating China a currency manipulator. Investor sentiment has taken a hit as the trade war between the world’s two biggest economies has escalated quickly.

After last week’s tariffs announcement by Trump, the market was expecting a reaction from China, noted Rodrigo Catril, senior strategist at National Australia Bank. “But based on recent behavior, there was still some expectation for China to take its time while also aim for a more measured response,” he said in a note.

“In the end, we got a little bit more than anticipated,” he said, with Beijing letting its yuan fall to levels the Chinese authorities had previously been cautious to breach. “We think it sends a signal that China is gearing up for a long trade battle with the US,” he said.
“Recent events suggest a US-China trade deal is unlikely... any time soon and indeed it seems reasonable to expect trade tensions to get worse before they get better.”

On Wall Street, the blue-chip Dow Jones Industrial Average sank 2.9 percent in the worst session of the year, the broad-based S&P 500 slumped 3.0 percent and the tech-rich Nasdaq Composite Index tumbled 3.5 percent. A decline in the yen against the dollar also helped Tokyo shares recoup some of their early losses, Kinouchi said.

The dollar was trading at 106.68 yen in Asia afternoon trade against 105.95 in New York Monday afternoon. Toyota tumbled 2.41 percent to 6,720 yen and Honda lost 0.21 percent to 2,560.5 yen, but Nissan rose 3.35 percent to 684.1 yen. Panasonic plunged 2.02 percent to 829.3 yen.


Japanese officials cautious on prospects for US trade deal

Updated 17 September 2019

Japanese officials cautious on prospects for US trade deal

  • A long-sought trade pact with Japan was scrapped when Donald Trump withdrew the US from a pan-Pacific trade agreement shortly after taking office in 2017
  • Trump said he preferred that Washington and Tokyo strike a bilateral deal

TOKYO: Officials in Japan appeared wary over the prospects for a trade deal with the US after President Donald Trump said he was prepared to sign a pact soon.
Japan’s chief government spokesman, Yoshihide Suga, said Tuesday that the two sides are still finalizing details after reaching a basic agreement in late August on trade in farm products, digital trade and other industries.
Suga said Trump and Prime Minister Shinzo Abe are considering signing a deal in late September when they attend the UN General Assembly in New York.
“We are accelerating the work that still remains,” he said. “But I decline to comment further because we have not reached a formal agreement.”
Trump’s notice to Congress, released by the White House on Monday, did not mention tariffs on autos and parts, long a sticking point between the two countries.
It said his administration was looking forward to collaborating with lawmakers on a deal that would result in “more fair and reciprocal trade” between the two countries.
Toshimitsu Motegi, who became foreign minister last week after negotiating the deal as economy minister, said Japan must watch carefully to prevent Washington from forcing any last-minute changes, Kyodo News agency reported.
The agricultural minister, Taku Eto, cautioned against letting down Tokyo’s guard until the final agreement is reached, it said.
A long-sought trade agreement with Japan was scrapped when Trump withdrew the US from a pan-Pacific trade agreement shortly after taking office in 2017.
Japan and the other 10 remaining members of the trade pact, the Trans-Pacific Partnership, then renegotiated their own deal without the US
Trump said he preferred that Washington and Tokyo strike a bilateral deal.
That resurrected the longtime issue of tariffs on Japanese car and auto parts exports to the US and of stiffer duties on US exports of farm and other products to Japan.