Tokyo stocks close lower on US-China tension

The Nikkei 225 index slipped 0.18 per cent, or 38.42 points, at 21,877.89. Over the week, the key index rose 7.31 per cent. — AFP pic
The Nikkei 225 index slipped 0.18 per cent, or 38.42 points, at 21,877.89. Over the week, the key index rose 7.31 per cent. — AFP pic

TOKYO, May 29 ― Tokyo stocks closed lower today, snapping a four-day winning streak, with investor sentiment dampened by rising US-China tensions over Hong Kong.

The Nikkei 225 index slipped 0.18 per cent, or 38.42 points, at 21,877.89. Over the week, the key index rose 7.31 per cent.

The broader Topix index lost 0.87 per cent, or 13.67 points, landing at 1,563.67, while gaining 5.81 per cent over the week.

Stock prices had risen recently on hopes for economic restarts and the development of vaccines against the coronavirus.

But “US-China tensions, especially possible action by the US over Hong Kong, do have the potential to change this narrative significantly”, said Tapas Strickland, economics and markets director at National Australia Bank.

US President Donald Trump has scheduled a press conference on China for later today following Beijing's approval of a plan for a security law in Hong Kong, prompting caution among investors.

“There is a lot of speculation of what this could entail, but could include removing specific protections regarding Hong Kong to allow sanctions against Chinese individuals/businesses operating in Hong Kong,” Strickland said in a commentary.

The move came after Washington revoked the special status conferred on Hong Kong, paving the way for the territory to be stripped of trading and economic privileges.

US Secretary of State Mike Pompeo said the status had been withdrawn because China was no longer honouring its handover agreement with Britain to allow Hong Kong a high level of autonomy.

The dollar fetched ¥107.13 (RM4.34) in Asian trade this afternoon, against ¥107.59 in New York late yesterday.

In Tokyo, Nissan dived 10.78 per cent to ¥400.9 yen and its smaller alliance partner Mitsubishi Motors tumbled 8.98 per cent to ¥304 after Nissan reported a huge US$6.2-billion annual net loss as it reels from the impact of the virus.

“We are extremely concerned about the impact from the coronavirus pandemic,” ratings agency Moody's said in a statement sent to AFP.

“The worsening of the global economic outlook could have great impact on demand in the auto industry,” it said.

Other carmakers were also lower, with Toyota trading down 3.12 per cent at ¥6,755 and Honda off 3.93 per cent at ¥2,784.

Among other shares, Sony eased 0.14 per cent to ¥6,874 while Uniqlo casualwear operator Fast Retailing rose 2.40 per cent to ¥60,530.

Japan's jobless rate in April stood at 2.6 per cent ― worse than the 2.5 per cent in the previous month and the highest figure since December 2017, the internal affairs ministry said minutes before the opening bell.

And Japan's industrial output plunged 9.1 per cent month-on-month in April, the industry ministry said separately, noting in a commentary that the country's factory output “is rapidly declining”. ― AFP

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