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Japanese shares struggle on trade, economic uncertainties

Credit: REUTERS/KIM KYUNG-HOON

Japanese share prices struggled to make headway on Monday as uncertainties over the global economy, U.S.-China trade frictions and the U.S. Federal Reserve's policy stance kept many investors on sidelines.

By Hideyuki Sano

TOKYO, June 17 (Reuters) - Japanese share prices struggled to make headway on Monday as uncertainties over the global economy, U.S.-China trade frictions and the U.S. Federal Reserve's policy stance kept many investors on sidelines.

Japan's Nikkei share average .N225 ended 0.03% higher at 21,124, helped by gains in a few of its heavyweights such as SoftBank Group 9984.T and Fast Retailing 9983.T.

But the broader Topix .TOPX fell 0.45% to 1,539.74, with decliners outnumbering advancers by 72-28, while the turnover at the main board dropped to 1.65 trillion yen, more than 30% below the average, reflecting a lack of enthusiasm.

Investors remain unsure how the United States and China can resolve their disputes over tariffs and technology, and uncertain whether U.S. President Donald Trump and Chinese leader Xi Jinping will meet on the sidelines of a Group of 20 summit in Osaka next week.

"The moment you would have a headline that the two won't meet in Osaka, the Nikkei could fall 500 points. Investors would want to raise the ratio of cash as much as possible," said Fujio Ando, advisor at Chibagin Securities.

Soft industrial output data from China on Friday added to the evidence that the economic disputes between the world's two biggest economies are taking toll on growth worldwide.

Most investors now expect the U.S. Fed to drop hints of a future rate cut when its policy makers meet later this week. Yet that could help to strengthen the yen against the dollar, to the detriment of Japanese exporters who earn dollars overseas.

Against this backdrop, investors scurried to shares of companies that cater to domestic demand and have small exposures to the global economy.

Morinaga Milk 2264.T rose 13.5% to one-year high, helped by a brokerage upgrade, while internet and e-commerce firm Rakuten 4755.T rose 4.2% to 21-month highs.

In contrast, many technology shares continued to face heavy selling pressure.

Keyence 6861.T dropped 1.5% while Tokyo Electron 8035.T shed 2.4%, Nidec 6594.T 2.2% and Shin-Estu Chemical 4063.T 1.3%.

Anritsu Corp 6754.T dropped 2.1%. Its shares had been flying high earlier this year on hopes of 5G equipment demand.

Japan Display 6740.T fell 7.0% after the embattled display maker said it has received notice from TPK Holding Co Ltd 3673.TW that the Taiwanese flat screen maker has decided against investing in the firm.

(Editing by Simon Cameron-Moore)

((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))

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

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