Japan Stocks end mixed in cautious trade

Headline indices of the Japan share market closed mixed in cautious trade on Tuesday, 09 April 2019, as renewed conflict in key oil producer Libya and the threat of new tariffs on European goods from President Donald Trump damped risk appetite. Total 22 subsectors out of 33 subsectors of the Tokyo Stock Exchange declined, whereas remaining 11 subsectors closed higher, with shares in Electric Power & Gas, Retail Trade, Real Estate, Land Transportation, and Construction issues being notable losers, whereas Oil & Coal Products, Electric Appliances, Mining, and Insurance issues were notable gainers. At closing bell, the 225-issue Nikkei Stock Average added 40.94 points, or 0.2%, at 21,802.59. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 1.38 points, or 0.09%, at 1,618.76.

Risk sentiments turned downbeat on geopolitical tensions emanating from Libya and Iran. The recent news report that the US is proposing tariff hikes on the EU products and announcing a ban on 16 Saudi Arabians to arrive in the country adds volume into the geopolitical risk. The Trump administration moved toward imposing tariffs on about $11 billion in imports from the European Union, in response to the block's subsidies for aircraft maker Airbus.

 

Meanwhile, investor sentiment was hampered following news that U.S. officials are "not satisfied yet" about all the issues standing in the way of a deal to end the U.S.-China trade war. However, a top White House official also stated that progress had been made in talks with China last week. Growing uncertainties on the Sino-U.S. trade front ahead of the Fed minutes release on Wednesday saw investors across the board adopt a cautious approach.

Market participants are now awaiting minutes of the Federal Open Market Committee's March meeting, due on Wednesday, while the European Central Bank meeting on the same day is also on investors' radar. There is an expectation for a dovish-biased statement based on what came out in March. The larger issue is how concerned are our policy makers over the state of global economy. The US Federal Reserve last month abandoned projections for any interest rate hikes this year amid signs of an economic slowdown.

CURRENCY NEWS: The Japanese yen, widely viewed as a safe-haven currency, appreciated against the dollar on Tuesday, as a sluggish US economic outlook. Orders for US-made goods fell modestly in February and the manufacturing sector is slowing amid rising inventories, data showed on Monday. US non-farm payrolls data on Friday also signalled a slowdown in wage growth and job cuts in the manufacturing sector even as employment accelerated. The Japanese yen traded at 111.35 against the dollar after touching an earlier low of 111.57.

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