Nikkei hits 6-week low as revived U.S.-China trade war sours sentiment

NIKKEI 225 - TOKYO. Japan's Nikkei hit a six-week low on Friday after U.S. President Donald Trump unveiled plans to impose new tariffs on China, reviving trade war concerns and slugging exporter and manufacturing firms.

The Nikkei share average ended the day down 2.11% at 21,087.16 after going as low as 20,960.09, its weakest since June 18.

Global equity markets were shaken after Trump said on Thursday that he would slap a 10% tariff on $300 billion of Chinese imports from Sept. 1. He added that the tariffs could be raised further if China's President Xi Jinping failed to move more quickly to strike a trade deal.

Shares of companies with exposure to China slipped. Industrial equipment makers Komatsu Ltd and Hitachi Construction Machinery Co fell 2.2% and 4.7%, respectively. Robot manufacturer Fanuc lost 3.8%.

"The biggest impact on Japanese shares from an escalation of the trade war comes from its negative effect on the Chinese economy," said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.

Exporters also retreated as the safe-haven yen jumped against the dollar on the back of heightened trade tensions. Toyota Motor Corp lost 2.3%, Subaru Corp fell 2.8% and Panasonic retreated 3.5%.

Technology shares sagged after rising last month on views that trade tensions between Washington and Beijing would ease. Tokyo Electron dropped 0.7%, TDK Corp fell 3.8% and Murata Manufacturing Co lost 1.6%.

Sharp Corp tumbled 13.7% after the company reported lower-than-expected operating profit in the April-June quarter as the trade war dampened demand for its electronics products.

Casio Computer Co swam against the tide and rallied 8% after its April-June operating profit rose 13.9% thanks to factors such as brisk sales of its G-SHOCK watches.

The broader Topix lost 2.16% to 1,533.46. Declining shares outnumbered gainers 1,994 to 129.

Editor: Wahyu T.Rahmawati