Tokyo stocks open lower as global trade worries weigh

AFP – Tokyo stocks opened lower on Monday amid worries about global trade as a key business sentiment survey showed confidence among Japan’s biggest manufacturers has slipped.

The benchmark Nikkei 225 index dropped 0.21 percent or 47.85 points to 22,256.66 in early trade while the broader Topix index was down 0.23 percent or 4.00 points to 1,726.89.

"Caution remains strong over the Trump administration’s trade policy towards China," said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.

"It is hard to predict exactly how the real economy as well as market sentiment would be affected" with the US administration poised to roll out tariffs on some $34 billion of Chinese imports on Friday, he told AFP.

A quarterly survey from the Bank of Japan showed confidence among major manufacturers slipping for the second straight quarter, but Sengoku said its negative impact on markets was small compared with the broader concerns over global trade.

The headline reading in the June report came in at a slightly worse-than-expected 21, down from 24 in March.

"The reading was not a positive factor but didn’t fall so deeply, despite the tough conditions in the April-June period ranging from the US-China trade spat to concerns over Europe" after the political shake-up in Italy, Sengoku said.

The yen has not strengthened enough to dampen Japanese exports, underpinning exporters’ sentiment, he added.

The dollar was trading at 110.77 yen against 110.61 yen in New York on Friday.

Nissan lost 1.11 percent to 1,066 yen while Toyota rose 0.20 percent to 7,185 yen.

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Nintendo gained 0.27 percent to 36,300 yen and Sony rose 1.12 percent to 5,728 yen.

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