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Tokyo stocks close lower on trade worries

Apr 10 2019 10:00

Tokyo stocks closed lower on Wednesday amid a flare-up in trade tensions between the United States and Europe, with investors eying a press conference by the European Central Bank president.

The benchmark Nikkei 225 index fell 0.53% to end at 21 687.57 while the broader Topix index was down 0.69% at 1 607.66.

"On top of the US-China trade war, tensions between the United States and Europe are escalating, spawning worries that the global economy may worsen further," Online Okasan Securities said in a note.

President Donald Trump on Tuesday lashed out at the EU, vowing to impose tariffs on billions in imports, over subsidies to the aviation giant Airbus.

The International Monetary Fund cut its US growth forecast significantly for 2019 though it said the United States is still likely to outpace other advanced nations as the world economy slows.

The financial uncertainty underpinned the Japanese currency, with the dollar trading at ¥111.17 against ¥111.15 in New York on Tuesday afternoon.

A higher yen is negative for Japanese exporters as it makes their products less competitive abroad and erodes their profits when repatriated.

Traders were also eyeing a press conference by European Central Bank President Mario Draghi to be held later in the day.

Nintendo fell 0.96% to ¥32 920 and Toyota lost 0.52% to ¥6 795.

Japan Post tumbled 2.87% to ¥1 249 after news of a new share sale by the government.

The finance ministry said late on Tuesday it was preparing for a third sale of shares in the giant postal group.

The Nikkei business daily reported on Wednesday that the government was planning the sale as early as autumn this year to raise around ¥1.3 trillion.

The move would cut the ministry's stake to the legally mandated minimum of just over one-third from the current 57%, ending a privatisation process that has lasted more than a decade, the paper said.

Sony dropped 2.45% to ¥5 121 a day after it surged more than nine percent following a report that hedge fund Third Point is raising funds to build up its stake in the Japanese electronics company.

equities  |  markets  |  tokyo stocks


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