Nikkei drifts lower on U.S.-China trade uncertainty

  • Reuters
  • Stock Market News
Nikkei drifts lower on U.S.-China trade uncertainty
Credit: © Reuters.

* SoftBank Group, Fast Retailing fall on futures selling

* Financial stocks outperform after U.S. yields strong

By Ayai Tomisawa

TOKYO, July 17 (Reuters) - Japan's Nikkei edged lower on Wednesday after U.S. President Donald Trump's comments on trade soured risk sentiment, while tech shares and chip-related stocks slid in step with their U.S. counterparts.

But financial stocks such as banks and insurers, which benefit from higher yielding products such as foreign bonds, gained ground after U.S. Treasury yields rose on data showing U.S. retail sales increased more than expected in June.

The Nikkei share average .N225 fell 0.3% to 21,470.69 in mid-morning trade, while the broader Topix .TOPX gained 0.1% to 1,570.55.

On Wednesday, U.S. stocks were dented after Trump said there was a long way to go with China on trade and threatened to put tariffs on another $325 billion of Chinese goods. is uncertainty over trade talks. The market has become sensitive again on whether there will be progress in the talks between the United States and China," said Yoshinori Shigemi, global market strategist at JPMorgan (NYSE: JPM ) Asset Management.

"We will stay cautious against trade-related headlines for now."

After the Philadelphia semiconductor index .SOX dropped overnight, Tokyo Electron 8035.T and Advantest Corp 6857.T both shed 0.8%. Other tech shares followed suit, with TDK Corp 6762.T declining 1.3% and Taiyo Yuden 6976.T sliding 1.8%.

Meanwhile, financial stocks outperformed, with Sumitomo Mitsui Financial Group 8316.T rising 0.5%, Dai-ichi Life Holdings 8750.T adding 0.3% and T&D Holdings 8795.T soaring 0.9%.

Futures selling dragged down index-heavy stocks such as SoftBank Group 9984 , Fast Retailing 9983.T and Terumo Corp 4543.T , which fell 2.9%, 1.3% and 1.7%, respectively.

Elsewhere, Aeon Fantasy 4343.T , which operates entertainment facilities in shopping centres, jumped 10% after the company said its June same-store-sales soared 13.2% on the year thanks to the popularity of medal games, a type of game played for tokens commonly found in shopping arcades in Japan.

Declining issues outnumbered advancing ones 1,325 to 714.

(Editing by Jacqueline Wong)

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