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Tokyo stocks close down as US-China trade war weighs

TOKYO: Tokyo stocks closed lower on Wednesday with investors discouraged by US President Donald Trump's negative tweets

Jul 31 2019

TOKYO: Tokyo stocks closed lower on Wednesday with investors discouraged by US President Donald Trump's negative tweets on China as the world's two biggest economies resumed trade talks.

The benchmark Nikkei 225 index fell 0.86 percent, or 187.78 points, to 21,521.53 while the broader Topix index was down 0.66 percent, or 10.44 points, at 1,565.14.

Investor sentiment was dampened after Trump accused China of going back on commitments as the two sides returned to the negotiating table for trade talks in Shanghai.

"It is certainly not a great look as US trade negotiators enter a second day of negotiations in Shanghai," said Rodrigo Catril, strategist at National Australia Bank.

"The only positive thing we can say for now is that the two parties are still willing to carry on talking... but expectations of a compromise are very low with Chinese media stressing the need for the US to meet China 'halfway'," he said in a commentary.

Market players were also cautious ahead of a key Federal Reserve decision.

The US central bank is expected to cut interest rates at a two-day monetary meeting that began on Tuesday but investors are not sure how big the cut will be.

"Profit-taking could easily emerge, which reflects the weakness of the current Tokyo market," said Shinichi Yamamoto, broker at Okasan Securities in Tokyo.

The dollar was trading at 108.56 yen in Asian afternoon trade, little changed from New York on Tuesday afternoon.

In individual stocks trade, Sony soared 5.30 percent to 6,170 yen after the entertainment giant on Tuesday reported higher operating profit for the first quarter thanks to strong demand for its image sensors.

Nintendo lost 1.20 percent to 40,100 yen after it reported a first-quarter net profit dive of 46 percent due to exchange rate losses.

Panasonic was unchanged at 924.7 yen as it prepared to announce results shortly after the market closed.

Declines in market heavyweights led the index falls, Yamamoto said.

Uniqlo casual wear operator Fast Retailing dropped 1.95 percent to 65,550 yen with SoftBank Group down 0.91 percent at 5,628 yen.

Copyright AFP (Agence France-Press), 2019