Tokyo's Nikkei Index Down More Than 1.8% 15 October 2018
Umer Jamshaid Published October 15, 2018 | 02:03 PM
Tokyo's benchmark Nikkei index dropped more than 1.8 percent on Monday, with pessimism over Japan-US trade negotiations and an expected tax hike weighing on the Japanese market.
Tokyo, (UrduPoint / Pakistan Point News - 15th Oct, 2018 ) :Tokyo's benchmark Nikkei index dropped more than 1.8 percent on Monday, with pessimism over Japan-US trade negotiations and an expected tax hike weighing on the Japanese market.
The Nikkei 225 index fell 1.87 percent or 423.36 points to close at 22,271.30, while the broader Topix index was down 1.59 percent or 27.01 points at 1,675.44.
The declines came after US Treasury Secretary Steven Mnuchin said during the weekend the US wants to include a provision to prevent Currency manipulation in future trade deals with Japan.
"The Mnuchin comments hit hard the market today," said Yoshihiro Okumura, general manager at Chibagin Asset Management.
The Yen rose against the Dollar following the news as the provision may hinder Tokyo's monetary policies, which are largely seen supportive of a weak yen.
The dollar fell to 111.95 yen in afternoon trade from 112.18 yen in New York late Friday.
Also encouraging market bears was an expected announcement by Prime Minister Shinzo Abe of a two percentage point hike in the sales tax, which most experts believe will act as a drag on the world's third-biggest economy.
"We have never seen a share price rise in the past after an announcement of a sales tax hike," noted Kyoko Amemiya, senior market strategist at SBI Securities.
Some investors were also seen taking profits after a strong rebound on Friday, she added.
Looking ahead, investors are closely watching a series of global economic data due later this week, said Tsuyoshi Nomaguchi, a strategist at Daiwa Securities.
"The focus is how much impact US interest rate rises would have on housing-related data, and the extent of the US-China trade war's impact on the Chinese economy," he said.
For that reason China's July-September GDP data due on Friday is worth an especially close watch, he said.
In Tokyo, SoftBank Group plunged 7.26 percent to 9,251 yen amid concerns about its ties with Saudi Arabia's government, which has been under increased scrutiny over the disappearance of a journalist critical of Riyadh.
"Speculation over several factors surrounding SoftBank, including its ties with Saudi Arabia, has helped accelerate sales of its shares," Okumura said.
Oil-related shares were mixed, with oil refiner Idemitsu Kosan down 1.16 percent at 5,930 yen but Inpex Holdings up 2.56 percent at 1,381 yen.
"The market remains a bit unstable with factors such as higher oil" worrying investors, said Amemiya at SBI Securities.
The oil price has spiked due to concerns over worsening US-Saudi Arabia relations due to the alleged murder of the journalist.
Automakers were also among the losers, with Toyota down 2.39 percent at 6,450 yen and Nissan down at 0.64 percent at 1,000.5 yen.
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