TOKYO, Aug 18 ― Tokyo's benchmark Nikkei index moved lower in early trade today after Wall Street shares slipped and with Japan struggling to control a surge in virus cases.

The Nikkei 225 index gave up gains and slipped 0.08 per cent, or 22.24 points, to 27,402.23 while the broader Topix index also edged down 0.03 per cent, or 0.49 points, to 1,915.14.

The dollar stood at ¥109.56 (RM4.24), nearly flat from ¥109.59 in New York yesterday.

The falls came as Wall Street shares ended lower after a five-day winning streak following a lacklustre US retail sales report that exacerbated worries about the latest Covid-19 wave.

"It's hard to expect sharp falls (in Tokyo) now since the market has already been soft since the start of the week,” Okasan Online Securities said in a note.

"But active buying is also unlikely as the spread of the Delta variant shows no signs of slowing down,” Okasan said.

The market is seeing some bargain hunting, but not enough to lift the overall market for now, it added.

"In addition to the overnight falls of US and European shares, the Japanese government extended the current state of emergency” for Tokyo and other areas as the nation struggles to control a surging infection wave, the brokerage said.

"Investors continue to believe that economic normalisation will be delayed because of the spread of the coronavirus,” Okasan said.

Shortly before the market opened, the finance ministry reported that Japan's exports surged 37 per cent in July compared with the same month a year ago, thanks to a recovery in automobile and steel exports.

It marked five straight months of increase, while imports also rose 28.5 per cent for the same month from a year ago.

Japan's core machinery orders fell 1.5 per cent in June from the previous month.

The negative reading however was better than an expected fall of 2.9 per cent, the median forecast among private economists surveyed by the Nikkei QUICK.

Among major shares, Toyota dropped 0.12 per cent to ¥9,741.

Sony Group added 0.23 per cent to ¥10,745.

Advantest, producer of chip testing tools, gave up earlier gains and fell 0.33 per cent to ¥9,040.

Construction equipment maker Komatsu slipped 0.58 per cent to ¥2,724.5. ― AFP