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Japan Market falls as stronger yen, trade issues dash sentiment

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Headline shares of the Japan share market closed lower on Monday, 05 August 2019, Friday, 02 August 2019, as the market mood turned risk-off on as a rapid escalation in the Sino-US trade. The rapidly strengthened yen also soured sentiment. Every industry category retreated into negative territory, with iron and steel, electric appliance and real estate-linked issues being notable losers. At closing bell, the 225-issue Nikkei Stock Average dropped 366.87 points, or 1.74%, to 20,720.29, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 27.58 points, or 1.8%, at 1,505.88.

U. S. President Donald Trump abruptly decided on Thursday to slap a 10% tariff $300 billion on Chinese imports effective from 01 September 2019, stunning markets and ending a month-long trade truce. China vowed to fight back on Friday.

Shares of major exporters declined on a stronger yen.

Mitsubishi Electric lost more than 4%, while Sony and Canon were lower by almost 3% each. Panasonic declined more than 2%. Advantest dropped almost 2% and Tokyo Electron was lower by more than 3%. Honda Motor fell more than 1% and Toyota Motor was down almost 1%. On Friday, Honda reported a nearly 30% decrease in profit for the first quarter from the year-ago period, while Toyota said its first-quarter net income increased from last year. Both the companies lowered their full-year outlook.

Kobe Steel nosedived 13% to its seven-year low, after the country's third-largest steelmaker cut its recurring profit forecast for the financial year ending March by 67% as the U. S.-China trade war battered steel demand for automobiles and aluminium and copper demand for chips.

Sysmex tumbled 13% as the medical devices maker reported weaker-than-expected profits for the April-June quarter.

Yahoo Japan slid 12% after the internet company's operating profit fell 24%, disappointed investors.

CURRENCY NEWS: The yen strengthened against the US dollar on Monday, as investors opted a safe harbours amid escalation in the Sino-US trade war. The Japanese yen was trading at 105.95 against the dollar after strengthening from levels above 108.8 in the previous trading week.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, August 05 2019. 12:34 IST