Japan Nikkei falls on concerns over outlook for trade talks

The Japan share market finished session lower on Thursday, 21 November 2019, on Thursday, 21 November 2019, as investors turned anxious about the possibility that the U.S. and China may not reach a trade deal before next year, with a fresh row over U.S. legislation on Hong Kong potentially complicating their negotiations. However, market losses capped after China and the US announced they'd reached a phase one trade deal. At closing bell, the 225-issue Nikkei Stock Average declined 109.99 points, or 0.48%, to 23,038.58, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange sank 1.73 points, or 0.1%, at 1,689.38.

Total 18 issues of the 33 industry category of Topix index dived into negative territory, with Marine Transportation, Nonferrous Metals, Pulp & Paper, Insurance, and Warehousing & Harbor Transportation Services issues being notable losers, while Electric Power & Gas, Real Estate, Rubber Products, and Construction issues were notable gainers.

Market participants commenced trading in a back foot on concerns a preliminary trade deal between Washington and Beijing may not be completed this year as negotiators continue to wrestle over differences. Beijing is pressing Washington to agree to broader tariff rollbacks on Chinese goods and the Trump administration counters with heightened demands of its own. Doubts about substantive progress on a partial trade deal with China ahead of a Dec. 15 deadline for the increase of import tariffs on about $160 billion in Chinese imports somewhat undermined sentiment.

Adding to the tensions between the world's two biggest economies, the US House of Representatives on Wednesday passed legislation intended to support protesters in Hong Kong and send a warning to China about human rights.

Semiconductor-related stocks were lower. Tokyo Electron slid 4%, Advantest dropped 3.1% and Screen Holdings dived 5.3%.

SoftBank Group shares fell 2.3% after reports that the tech conglomerate is in talks to receive about 300 billion yen in financing from Japanese banks, led by Mizuho Financial Group. Mizuho's shares dipped 0.7%.

ECONOMIC NEWS: Japan All Industry Activity Up 1.5% On Month In September--Japan's all industry activity rose 1.5% month-on-month in September, after remaining unchanged in August, figures from the Ministry of Economy, Trade and Industry showed on Thursday. Among components, construction activity dropped 2.2% monthly in September, bigger than the 0.5% fall in August. Meanwhile, industrial production grew 1.7% in September, after a 1.2% decline in the preceding month. The tertiary industry activity rose 1.8% in September, following a 0.3% increase in the previous month. On a yearly basis, the all industry activity index gained 2.9% in September, in contrast to a 0.6% fall in the prior month.

CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, eased against greenback. The Japanese yen traded at 108.6 against the dollar after touching an earlier high of 108.27.

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