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Tokyo stocks close sharply lower on strong yen
[TOKYO] Tokyo stocks closed sharply lower on Monday, weighed down by a strong yen and tracking losses on Wall Street amid US-China trade woes.
The benchmark Nikkei 225 index dropped 1.74 per cent, or 366.87 points, to end at 20,720.29 while the broader Topix index lost 1.80 per cent, or 27.58 points, at 1,505.88.
The greenback was trading at 105.91 yen (S$1.37995) in Asian trade, down from 106.59 yen in New York on Friday afternoon compared to the 108.00 yen figure seen a week earlier.
A strong yen is a negative for Japanese exporters as it makes their products less competitive abroad and also erodes profits when repatriated.
"In currency markets, the yen rose on risk aversion," Masayuki Kubota, chief strategist at Rakuten Securities, said in a report.
US President Donald Trump's announcement on tariffs "intensified tensions between the United States and China and spread fears that the global economy may worsen, sparking stock sell-offs globally", he said.
"Global stock markets have been swayed by President Trump's remarks since 2019 as they impact speculation on whether the tensions will ease or worsen."
Investor sentiment took a hit last week as Mr Trump unveiled new tariffs on China, cranking up trade tensions between the world's top two economies.
News that demand for US exports had weakened underscored concern that trade was becoming a trouble spot for economies worldwide.
On Wall Street Friday, all three major indices sank to their lowest levels since June.
In individual stocks trade in Tokyo on Monday, SoftBank Group plunged 3.47 per cent to 5,356 yen while Sony dropped 2.84 per cent to 5,771 yen.
Nintendo fell 2.38 per cent to 39,330 yen while Toyota was down 0.62 per cent to 6,886 yen.