Nikkei drops to 10-week lows; automakers tumble on weaker than expected US sales

[TOKYO] Japan's Nikkei share average fell on Tuesday to 10-week lows as the safe-haven yen rose and as automakers tumbled on weaker-than-expected US sales.

Financial stocks such as banks and insurers, which seek to boost returns from higher yielding US bonds, also lost ground after yields on 10-year US Treasury notes overnight fell to the lowest level since Feb 27.

The Nikkei dropped 0.9 per cent to 18,810.25 points, the lowest closing level since Jan 24.

The US dollar extended overnight losses and was down 0.4 per cent at 110.51 yen after hitting 110.370, its lowest in a week, as investors are cautious before the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping, while sentiment was soured by suspected suicide bombing in St Petersburg, Russia.

The broader Topix dropped 0.8 per cent to 1,504.54 and the JPX-Nikkei Index 400 declined 0.8 per cent to 13,463.23.

REUTERS