Japan stocks fall most in three weeks on trade talk doubts

By Stanley White

TOKYO, Oct 30 (Reuters) - Japan's benchmark Nikkei index pulled back from its the highest level in more than a year on Wednesday as conflicting signals from the U.S. government dampened optimism for a preliminary trade agreement with China.

The Nikkei index ended Wednesday down 0.57% at 22,843.12, its biggest decline in three weeks.

It was the first downturn for Japanese stocks in eight trading sessions, after a U.S. administration official told Reuters on Tuesday that an interim U.S.-China trade agreement might not be completed in time for signing at an Asia-Pacific Economic Cooperation summit in Chile on Nov. 16-17.

A delay does not mean the accord is falling apart, the official said. However, the remarks conflicted with U.S. President Donald Trump's comments on Monday that he expected to sign a significant part of the trade deal with China ahead of schedule.

Trump's comments had lifted global stock markets and sent the Nikkei to its the highest point in more than a year on Tuesday.

Investors also avoided taking big long positions before a U.S. Federal Reserve policy decision later on Wednesday and a Bank of Japan meeting on Thursday.

"Investors are booking some profits, and there are some position adjustments before the Fed and the BOJ," said Yutaka Masushima, market analyst at Monex Securities in Tokyo. "Trump said there was a lot of progress in trade talks, but past experience shows his comments have betrayed expectations, so there is some caution."

There were 143 decliners on the Nikkei index against 79 advancers on Wednesday.

The largest percentage losses in the index were electronics manufacturer NEC Corp 6701.T, down 5.83%, followed by rival electronics manufacturer Omron Corp 6645.T losing 5.17% and Kobe Steel Ltd 5406.T down by 4.77%.

Packaged food maker Nisshin Seifun Group Inc 2002.T jumped 8.96%, electronics conglomerate Fujitsu Ltd 6702.T rallied 7.74% and cosmetics maker Shiseido Co Ltd 4911.T rose by 3.98%.

The broader Topix index .TOPX added 0.19% to 1,665.90. It earlier reached its highest level since Dec. 4, 2018.

The volume of shares traded on the Tokyo Stock Exchange's main board .TOPX was 1.79 billion, compared with the average of 1.24 billion in the past 30 days.

(Editing by Shri Navaratnam)

((stanley.white@tr.com; +81 (0)3 4563 2799; twitter.com/stanleywhite1 ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.