Japan Market extends losses

Headline shares of the Japan share market closed lower on Thursday, 18 July 2019, on tracking losses on Wall Street overnight, the yen's rise against the U.S. dollar, and fresh concerns that the protracted trade stand-off between the United States and China could hurt U.S. corporate earnings. Most of subsectors of the Topix's index dropped, with Oil and coal product, marine transportation and electric appliance-linked issues being notable losers. At closing bell, the 225-issue Nikkei Stock Average fell 381.86 points, or 1.78%, to 21,087.32, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 30.45 points, or 1.94%, at 1,536.96.

President Donald Trump's latest remarks stoked fresh concerns about U.S.-China trade relations. Trump reportedly said there was a long way to go before a trade deal was reached with China and that he could impose tariffs on $325 billion of additional Chinese goods if he wanted. His comments brought back the focus on trade worries, which were allayed last month after Trump and Chinese President Xi Jinping agreed to a temporary truce at the G-20 gathering. Following that meeting, the U.S. had agreed to hold off on imposing tariffs on more Chinese goods and to recommence talks.

 

As the U.S. earnings season kicked off, weak results from railway transport company CSX Corp stoked concerns that the protracted trade standoff between the United States and China could hurt the profits of U.S. companies. The outlook is seen even bleaker in Japan as companies struggle with the U.S.-China tariff war amid deteriorating global conditions that have dragged on its exports.

Cyclical shares were lower, with electric machinery shares falling 1.8%. Hitachi was down 2.2% while Panasonic shed 2.1%.

Canon fell 2.8% after reports its operating profit was on track to sink 40% this year. NOK Corp fell 6.6% after the manufacturer of seal products slashed its earnings outlook, cutting its annual operating profit estimates by 34% on weak sales of car-related products in North America and China.

Akebono Brake Industry Co hit limit-high, rising 43% after the troubled car parts maker said it expects to receive investment from a corporate turnaround fund to help restructure its money-losing business.

ECONOMIC NEWS: Japan balance of trade bounces back strongly in June--Japan's trade balance fought back strongly in the month of June to post a merchandise trade surplus of 589.5 billion Yen in June against 968.3 billion Yen deficit in May. Exports were down 6.7 percent on year, while imports were down an annual 5.2 percent.

CURRENCY NEWS: The Japanese yen, widely viewed as a safe-haven currency, traded at 107.68 against the dollar after strengthening from levels above 108.0 yesterday.

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