Japan Market falls as stronger yen, trade issues dash sentiment

Headline shares of the Japan share market closed lower on Monday, 05 August 2019, Friday, 02 August 2019, as the market mood turned risk-off on as a rapid escalation in the Sino-US trade. The rapidly strengthened yen also soured sentiment. Every industry category retreated into negative territory, with iron and steel, electric appliance and real estate-linked issues being notable losers. At closing bell, the 225-issue Nikkei Stock Average dropped 366.87 points, or 1.74%, to 20,720.29, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 27.58 points, or 1.8%, at 1,505.88.

U.S. President Donald Trump abruptly decided on Thursday to slap a 10% tariff $300 billion on Chinese imports effective from 01 September 2019, stunning markets and ending a month-long trade truce. China vowed to fight back on Friday.

 

Shares of major exporters declined on a stronger yen. Mitsubishi Electric lost more than 4%, while Sony and Canon were lower by almost 3% each. Panasonic declined more than 2%. Advantest dropped almost 2% and Tokyo Electron was lower by more than 3%. Honda Motor fell more than 1% and Toyota Motor was down almost 1%. On Friday, Honda reported a nearly 30% decrease in profit for the first quarter from the year-ago period, while Toyota said its first-quarter net income increased from last year. Both the companies lowered their full-year outlook.

Kobe Steel nosedived 13% to its seven-year low, after the country's third-largest steelmaker cut its recurring profit forecast for the financial year ending March by 67% as the U.S.-China trade war battered steel demand for automobiles and aluminium and copper demand for chips.

Sysmex tumbled 13% as the medical devices maker reported weaker-than-expected profits for the April-June quarter.

Yahoo Japan slid 12% after the internet company's operating profit fell 24%, disappointed investors.

CURRENCY NEWS: The yen strengthened against the US dollar on Monday, as investors opted a safe harbours amid escalation in the Sino-US trade war. The Japanese yen was trading at 105.95 against the dollar after strengthening from levels above 108.8 in the previous trading week.

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