TOKYO, Sept 30 — Tokyo stocks closed lower today as investors locked in profits amid fresh concerns about the US-China trade row.

The benchmark Nikkei 225 index lost 0.56 per cent or 123.06 points to 21,755.84 while the broader Topix index ended down 1.03 per cent or 16.45 points at 1,587.80.

"Profit-taking led trade with sentiment weighed down by uncertainty over the US-China trade row,” said Yoshihiro Ito, chief strategist at Okasan Online Securities.

Wall Street closed lower on Friday after reports that US President Donald Trump is mulling severe new restrictions on investment in China.

The US and China have been locked in a bruising trade war for more than a year, with the world’s two biggest economies imposing tariffs on hundreds of billions of dollars in bilateral trade.

Despite ongoing trade pressure with the US, China’s manufacturing sector showed unexpected signs of improvement with two indexes showing today that manufacturing activity edged up in September.

Later this week, market participants were awaiting key events and data, including the Bank of Japan’s Tankan quarterly business confidence survey tomorrow, a sales tax hike also tomorrow, and US jobs data on Friday, analysts said.

Negative impact on domestic demand because of the tax hike "will likely be smaller than the previous tax hike” in 2014, said Mitsuhiro Shibuya, senior strategist at Daiwa Securities.

In individual share trading, IT investor SoftBank Group fell 2.61 per cent to ¥4,240 (RM164.72).

Automakers were also losers, with Toyota closing down 2.07 per cent at ¥7,216, Honda down 1.46 per cent at ¥2,798.5 and Nissan off 1.72 per cent at ¥674.1.

The dollar was trading at ¥107.85 against ¥107.95 in New York on Friday. — AFP