Tokyo stocks rebound after dips on US tariffs on China

Tokyo - Tokyo stocks opened lower but quickly bounced back into the green on Tuesday, as investors braced for Beijing's reaction after the US announced tariffs on another $200bn in Chinese goods.

The benchmark Nikkei 225 index, which opened lower, was up 0.33% or 75.83 points at 23 170.50 after the first 30 minutes of trade.

The broader Topix index was up 0.47% 8.11 points at 1 736.72.

US President Donald Trump on Monday defied warnings and escalated the trade confrontation with China, hitting the country with tariffs starting next week on another $200bn in imports and threatening to target even more if Beijing retaliates.

The latest round of imports will face 10% tariffs through the end of the year, and then the rate will jump to 25%.

"The news was not positive even though markets had already factored it in somewhat," said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.

"But Washington made some concessions such as its exclusion of smart watches from the sanctions list... Now that America has taken the first move, we'll watch how China will move next," he told AFP.

• READ: Stocks hit by threat of new Trump tariffs on China

Sengoku added he believed both sides would eventually seek a compromise.

Only last week, Beijing said it welcomed overtures from US officials offering to re-start trade talks, but press reports indicate China would call off any meetings if the new punitive duties take effect.

Trump warned that if China takes retaliatory action against "our farmers or other industries", Washington could raise tariffs on $267bn of additional imports.

That would mean imposing new taxes on all of the goods the US imports from China.

The dollar eased to ¥111.77 from ¥111.83 in New York on Monday afternoon.

In individual stocks trade, Toyota rose 0.45% to ¥6 879 while IT investor SoftBank Group fell 2.55% to ¥10 665.