Nikkei ends at 8-week low, U.S. FX comments hit automakers; Softbank sinks

  • Reuters
  • Stock Market News
Nikkei ends at 8-week low, U.S. FX comments hit automakers; Softbank sinks

* Topix ends at a level not seen since late March

* Investors worry firms may have to cut profit forecasts after Mnuchin comment - analysts

* SoftBank tumbles as geopolitical tensions between Saudi and West grow

* Ono Pharma falls after co says Opdivo fails trial study

By Ayai Tomisawa

TOKYO, Oct 15 (Reuters) - Japan's Nikkei ended at an eight-week low on Monday as automakers and other manufacturers were hit by news that Washington would seek a provision about currency manipulation in future trade deals, including with Japan. Nikkei share average .N225 ended 1.8 percent lower at 22,271.30, the weakest closing point since Aug. 21.

The broader Topix .TOPX dropped 1.6 percent to 1,675.44, the lowest finish level in almost seven months.

"The U.S. comment has made the market very tense," said Mutsumi Kagawa, chief global strategist at Rakuten Securities. "While rising raw materials' prices are already a worry for companies, a stronger yen is also a big threat to automakers and other exporters, which may have to cut their profit forecasts."

A strong yen cuts Japanese manufacturers' competitiveness in the global market as well as profits made abroad when repatriated.

On Monday, the yen JPY= strengthened to 112.07 versus the dollar, building on recent gains, as global risk-off sentiment kept alive safe haven bids on the Japanese currency. Treasury Secretary Steven Mnuchin on Saturday told reporters at the International Monetary Fund and World Bank annual meetings in Bali that Washington views the currency chapter in the new U.S.-Mexico-Canada Agreement as a model for future trade deals to deter trading partners from currency manipulation. objective would be that the currency issues ... We'd like to include (them) in future trade agreements. With everybody. I'm not singling out Japan on that," Mnuchin said, when asked whether the United States will discuss currencies in trade negotiations with Japan.

Automakers underperformed, with Toyota Motor Corp 7203.T dropping 2.4 percent and Honda Motor Co 7267.T down 2.6 percent.

Elsewhere, SoftBank Corp 9984.T tumbled 7.3 percent to 9,251 yen to a level not seen since early August on concerns over its ties to Saudi Arabia. Arabia, which provided much of the funding for the SoftBank Vision Fund, is facing growing pressure from world leaders and businesses over the disappearance of a prominent Saudi journalist. shares have also been volatile over the past week on worries about its exposure to various global tech companies which have been at the receiving end of a recent sell-off.

"Selling (in SoftBank) is more psychological than anything related to worries on its fundamentals," said Makoto Kikuchi, a chief executive of Myojo Asset Management.

He also said that Monday's weakness in the Japanese stock market was partly due selling in Nikkei 225 futures , which puts disproportionate pressure on the benchmark index's heavyweights such as SoftBank.

Other exporters also lost ground. Precision equipment maker Olympus Corp 7733.T shed 1.7 percent and air-purifier company Daikin Industries 6367.T dropped 2.3 percent.

Ono Pharmaceutical 4528.T declined 2 percent after the company said its potential blockbuster cancer drug Opdivo, which was developed with Bristol-Myers Squibb BMY.N , failed in its late-stage trial for lung cancer. (Editing by Shri Navaratnam)

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