Japan Nikkei tumbles on latest tariff news

Headline indices of the Japan share market dropped on Wednesday, 11 July 2018, amid sign of escalating trade tensions between the world's two biggest economies after the United States said it would impose tariffs on an extra 200 billion worth of Chinese imports. Among TSE33 issues, 29 issues inclined, while 4 declined, with shares of Pharmaceutical, Wholesale Trade, Pulp & Paper, Electric Power & Gas, Iron & Steel, and Marine Transportation issues being notable gainers. Around late afternoon, the benchmark Nikkei 225 index dropped 1.26%, or 278.79 points, to 21,918.10. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 1%, or 17.13 points, to 1,699.

The United States government decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement. The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10% tariffs on an extra $200 billion worth of Chinese imports.

 

U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. It also includes consumer goods ranging from car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

Last week, Washington imposed 25% tariffs on $34 billion of Chinese imports, drawing immediate retaliatory duties from Beijing on US imports in the first shots of a heated trade war. US President Donald Trump had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports.

The news sent stocks tumbling, and prompted a senior Chinese commerce ministry official to warn that the United States was harming the global trade order.

On the economic news front, Japan Producer Prices Up 0.2% On Month In June -- Japan producer prices added 0.2% on month in June, the Bank of Japan said on Wednesday, down from 0.6% in May. On a yearly basis, producer prices advanced 2.8%, up from 2.7% in the previous month. Export prices were up 0.1% on month and 3.5% on year in June, the bank said, while import prices climbed 1.8% on month and 10.5% on year.

Japan Core Machine Orders Fall 3.7% In May -- Japan core machine orders dropped 3.7% on month in May coming in at 907.9 billion yen, the Cabinet Office said on Wednesday, following the 10.1% spike in April. On a yearly basis, machine orders surged 16.5%, following the 9.6% jump in the previous month.

CURRENCY NEWS: The Japanese yen appreciated against U.S. dollar in Tokyo on Wednesday. The dollar was down 0.1% at 110.88 yen, pulled back from a near two-month peak of 111.355.

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