Japan Market falls on stronger yen, Trump trade comments

Headline indices of the Japan share market closed down on Monday, 23 July 2018, as investors fretted over global trade war tensions after US President Donald Trump threatened more tariffs on Chinese imports. Meanwhile, selloff pressure intensified amid yen appreciation against greenback. Among TSE33 issues, 24 issues declined, while 9 inclined, with shares of Transportation Equipment Information & Communication, Textiles & Apparels, Glass & Ceramics Products, and Electric Appliances issues being notable losers, while Banks, Insurance, Other Financial Business, and Securities & Commodities Futures issues were notable gainers. The benchmark Nikkei 225 index declined 1.35%, or 306.33 points, to 22,391.55. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, fell 0.35%, or 6.04 points, to 1,738.94.

President Donald Trump on Friday said China and the European Union were manipulating their currencies and interest rates lower, and repeated a threat to slap China with $500 billion worth of tariffs on import of their products into the US, as a trade dispute between the world's two biggest economies intensified with no signs a resolution was near at hand. Mr Trump's more aggressive protectionists policies have sparked retaliatory measures from countries around the world, rattling financial markets worried about the impact on global growth.

 

Shares of export-related players declined, as yen appreciation against greenback. A stronger yen tends to reduce Japanese exporters' profits made abroad when repatriated. Shares of gaming giant Nintendo, chip-making equipment manufacturer Tokyo Electron, and industrial robots maker Fanuc fell in a range of 1% to 3%. Toyota Motor Corp, TDK Corp, Advantest Corp, and Panasonic Corp fell in a range of 0.9% to 3.5%.

Fast Retailing Co, the operator of the Uniqlo clothing chain, closed down, hurt by speculation that a potential tweak to the BOJ's monetary policy could put the shares at a disadvantage.

Banks, on the other hand, rallied on speculation that any tweaks to the BOJ's interest rate target could eventually lead to higher yields.Shares of Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group, Sumitomo Mitsui Banking Corp, and Shinsei Bank advanced in a range of 3% to 4.5%

CURRENCY NEWS: The Japanese yen appreciated against U.S. dollar on Monday, as safe heaven demand resumed after US President Donald tweets attacking Beijing and the EU for "manipulating their currencies and interest rates lower" to gain a trade advantage on Friday. The dollar remained weaker in Asia, changing hands at Y110.98, against Y111.55 in New York late on Friday.

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