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Tokyo stocks close lower as US-Japan trade talks continue

Aug 10 2018 08:59

Tokyo stocks closed lower on Friday as investors held off on buying before holidays and awaited the outcome of US-Japan trade talks.

The Nikkei 225 index fell 1.33% to 22 298.08. Over the week, the benchmark lost 1.01%.

The broader Topix index lost 1.15% to 1 720.16, after falling 1.29% over the week.

"On top of the US-China trade row, Japan-US trade negotiations are under way in Washington, making investors cautious," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

After the first round of talks with US Trade Representative Robert Lighthizer on Thursday, Japan's economy minister Toshimitsu Motegi told reporters: "I think we had good discussions and I'm not pessimistic in any way."

Motegi said he would announce the outcome after a second day of talks on Friday.

Japan is hoping to win concessions on threatened US auto tariffs, which could pose a threat to the industry if implemented.

"By taking auto tariffs hostage, Washington wants a bilateral free-trade agreement while Tokyo wants a multilateral framework," Kagawa at Rakuten noted.

The dollar slipped to ¥110.94 from ¥111.09 in New York on Thursday afternoon.

The annual holiday season slowed trading and exacerbated the fall, said Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Centre.

"You can't buy before you go on holidays... Today's drop stemmed from calendar reasons rather than breaking news," he said.

Many market players will be away next week as Japan marks its annual Buddhist holidays.

Japan's solid growth data failed to boost the market.

"It is good that the economy rebounded from its negative growth in the January-March term but it's about a past quarter," Kagawa at Rakuten said.

"Looking forward, the effect from trade frictions could cast a shadow."

Official figures showed the world's third-largest economy grew 0.5% quarter-on-quarter in the April-June period, bouncing back to growth following its first contraction in two years.

In individual stocks trade, Toyota ended down 0.55% at ¥6 951 while Suzuki rallied 1.67% to ¥7 060 after sharp drops the previous day over its admission of improper inspections on some vehicles.

Kyocera fell 2.63% to ¥6 653 as companies actively operating in Europe fell due to the yen's rise against the euro.

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equities  |  markets  |  tokyo stocks
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