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Tokyo's Nikkei index snaps eight-day winning streak

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[TOKYO] Tokyo's benchmark Nikkei index dropped 1 per cent on Thursday as investors cashed in on recent gains after an eight-day winning streak.

The Nikkei 225, which surged to an eight-month high the previous day, lost 0.99 per cent or 237.05 points to close at 23,796.74, while the broader Topix index was down 1.18 per cent or 21.56 points at 1,800.11.

"Profit-taking emerged after the recent strong gains," said Hikaru Sato, senior technical analyst at Daiwa Securities.

"But some automakers benefited from the news that the US will not impose additional tariff levies on the Japanese auto industry" during bilateral trade talks, Sato told AFP.

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US President Donald Trump and Japan's Prime Minister Shinzo Abe announced an agreement to start negotiations on a trade deal Wednesday in New York, after talks on the sidelines of the United Nations General Assembly.

Abe later told reporters the two leaders had agreed to "refrain from taking measures against the spirit of" their agreement, "which means the US will not impose" additional tariffs on Japanese-made cars.

The dollar fetched 112.64 yen in Asian afternoon trade, compared to 112.74 yen in New York and 112.89 yen in Tokyo on Wednesday.

In Tokyo, banks lost ground, with Mitsubishi UFJ down 1.54 per cent at 705.2 yen and Sumitomo Mitsui Financial off 1.06 per cent at 4,545 yen.

Among automakers, Subaru jumped 2.62 per cent to 3,403 yen and Mazda rose 0.44 per cent to 1,340 yen, but Toyota lost 0.31 per cent to 7,008 yen.

In New York, the Dow closed down 0.4 per cent after the Federal Reserve increased interest rates and signalled it expects to keep lifting rates gradually.

AFP