Japan Nikkei slips on trade deal concerns, firmer yen

Headline indices of the Japan share market finished session down on Friday, 01 November 2019, on skepticism about a U.S.-China trade truce deal after reports that Chinese officials have been casting doubt over the possibility of a long-term trade deal with the U.S. At closing bell, the 225-issue Nikkei Stock Average was down 76.27 points, or 0.33%, to 22,850.77, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange declined 0.51 point, or 0.03%, at 1,666.50.

Total 22 issues of the 33 industry category of Topix index inclined into negative territory, with Mining, Nonferrous Metals, Precision Instruments Wholesale Trade, Pulp & Paper, and Pharmaceutical issues being notable losers, while Other Products, Electric Appliances, and Land Transportation issues were notable gainers.

 

Concerns over trade tensions resurfaced after reports that Chinese officials are doubtful that they will be able to reach a comprehensive, long-term trade deal with the U.S. The preliminary deal was meant to be signed at the APEC meeting in Chile, but the South American country announced this week that it will no longer be hosting. President Donald Trump tweeted Thursday "China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal."

The tariff war between the world's two biggest economies has disrupted supply chains and roiled financial markets for more than a year. The world's two biggest economies have wrangled for more than 15 months over U.S. allegations that China steals technology, forces businesses to hand over trade secrets and unfairly subsidizes its technology companies in an aggressive drive to supplant American technological dominance. They have imposed tariffs on hundreds of billions of dollars' worth of each other's goods in a trade fight that has slowed global economic growth. Negotiators from both countries are trying to settle details of the phase one deal, which sidesteps some of the biggest issues dividing the countries.

Shares of export-oriented companies and cyclical sectors came under pressure as the safe-haven yen appreciated against the dollar. Optical equipment maker Olympus shed 2.8%, while robot maker Fanuc fell 1.9% and electronics maker Toshiba dropped 1.8%.

Shares of gaming firm Nintendo surged 7.5%, after the company announced on Thursday a second-quarter profit that exceeded expectations on strong demand for its Switch console.

Sumitomo Corp dived 5.6% after the trading house lowered its full-year profit forecast and dividend forecast.

ECONOMIC NEWS: Japan unemployment rate came in at a seasonally adjusted 2.4% in September, the Ministry of Internal Affairs and Communications said on Friday, as compared to 2.2% In August. The job-to-applicant ratio was 1.57. The number of employed persons in September was 67.68 million, an increase of 530,000 0.8% on year. The number of unemployed persons in September was 1.68 million, an increase of 60,000 or an annual 3.7%.

CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, strengthened against greenback. The Japanese yen traded at 107.98 against the dollar after strengthening from levels above 108.5 in the previous session.

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