Tokyo's Nikkei index down more than 1.7% over trade row

Tokyo's benchmark Nikkei index dropped more than 1.7% on Tuesday, with investors jittery over US-China trade tensions and a strong yen.

The Nikkei 225 index fell 1.77% to close at 22 278.48 while the broader Topix index was down 1.55% at 1 743.92.

The market was under pressure after Trump unveiled plans to impose 10% tariffs on $200bn worth of Chinese goods over Beijing's "unacceptable" move to raise its own tariffs.

The US leader warned that after the new measures are in place - on top of existing 25% tariffs on $50bn in Chinese imports - tariffs on another $200bn would go forward "if China increases its tariffs yet again."

SBI Securities said the growing trade war had driven investors to the sidelines "as it is hard to tell how the escalating trade frictions between the United States and China will affect Japan."

The Japanese currency rose on safe-haven buying, with the dollar buying ¥109.61 against ¥110.56 in New York on Monday afternoon.

"As the dollar fell below ¥110, market sentiment deteriorated," Shinichi Yamamoto, broker at Okasan Securities in Tokyo, told AFP.

In Tokyo trading, Japanese flea market app Mercari soared 76.7% from its IPO price to close at ¥5 300 as it debuted on the Tokyo Stock Exchange.

"Mercari got off to a flying start" with investors impressed by its successful business model, Yamamoto said.

Companies with strong business ties with China fell. Komatsu dropped 2.48% to ¥3 180 and Hitachi Construction Machinery slipped 1.52% to ¥3 560.

Fujifilm lost 1.56% to ¥4 215 after it filed a lawsuit against Xerox in New York, seeking $1bn in damages after the US giant scrapped a merger with it.