You are here: Home » News-CM » International » Market Report
Business Standard

Japan Nikkei falls to 3-week low as US-China trade war intensifies

Capital Market 

Headline indices of the Japan share market tumbled on Monday, 26 August 2019, as risk aversion selloff triggered on intensifying concerns over the Sino-U. S. trade war after U. S. President Donald Trump said last Friday that America will hike tariffs on $250 billion worth of Chinese goods to 30% from 25% in response to Beijing new tariffs last Friday on $75 billion of U. S. goods. At closing bell, the 225-issue Nikkei Stock Average tumbled 449.87 points, or 2.17%, to 20,261.04, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange retreated 24.22 points, or 1.61%, at 1,478.03.

The US President Donald Trump announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U. S. products with new tariffs and hikes to existing duties.

On Friday, the US said it would begin the process of raising tariffs on around $250bn (203.8bn) of Chinese imports from 25% to 30%. Those hikes will be introduced from 1 October. The US also said fresh tariffs on an additional $300bn of Chinese goods, announced earlier this month, will now be at a rate of 15% instead of 10%.

The first batch of those tariffs will be introduced in September. In a tweet, Mr Trump said he planned to order US firms working in China to move their operations back to the US. It is unclear how he could force firms to comply.

The world's two largest economies have been locked in a bruising trade battle for the past year that has seen tariffs imposed on billions of dollars worth of one another's goods. Mr Trump has long accused China of unfair trading practices and intellectual property theft. In China, there is a perception that the US is trying to curb its rise.

Shares of machinery and chip-equipment makers were hit hard as the new round tariffs triggered profit-taking in companies which rely on China demand. Yaskawa Electric plunged 6.1% and Fanuc Corp slid 3.7%, while Tokyo Electron, Murata Manufacturing and TDK Corp shed 2.5%, 2.6% and 3.1%, respectively.

Automakers and exporters were broadly lower after the yen appreciated against the dollar to a level not seen since January 2019. A strong yen reduces corporate profits when they are repatriated. Subaru Corp slid 2.1% and Panasonic Corp dropped 2.3%.

CURRENCY NEWS: The yen, a gauge of risk sentiment due to its perceived status as a safe haven, appreciated against greenback on Monday. The Japanese yen, often viewed as a safe-haven currency during times of market turmoil, traded at 105.42 against the dollar after touching an earlier high of 104.44.

Powered by Capital Market - Live News

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

First Published: Mon, August 26 2019. 11:53 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU