Nikkei slides 2% on weak U.S. data, Trump tariffs on Europe imports

  • Reuters
  • Stock Market News
Nikkei slides 2% on weak U.S. data, Trump tariffs on Europe imports
Credit: © Reuters.

TOKYO, Oct 3 (Reuters) - Japanese shares tumbled on Thursday, with the Nikkei falling about 2%, after jobs data from the U.S. cemented concerns that the trade war with China is taking toll on the U.S. economy and as Washington opened a new trade war front with Europe.

The Nikkei share average .N225 fell 1.93% to 21,358.10, hitting its lowest levels in more than three weeks while the broader Topix .TOPX lost 1.87% to 1,566.51, also a three-week low.

The ADP (NASDAQ: ADP ) National Employment Report in the United States showed private payrolls growth in August was not as strong as previously estimated, another worrying signal after a report on Tuesday showing U.S. September factory activity contracted by the most in more than a decade. Trump administration said it will slap 25% tariffs on French wine, Italian cheese and single-malt Scotch whisky, in retaliation for European Union subsidies on large aircraft, threatening to trigger a tit-for-tat trans-Atlantic trade war. direct impacts on Japanese shares should be limited, markets are looking at them in terms of whether the world is heading further to protectionism, which will be bad for the global economy," said Masayuki Kubota, chief strategist at Rakuten Securities.

As investors fret about possible U.S. recession, Japanese cyclical shares led Thursday's losses with securities brokerages .ISECU.T falling 2.9% and transport equipment makers .ITEQP.T losing 2.8%.

Daiwa Securities Group Inc 8601.T dropped 3.3% and Nomura Holdings Inc 8604.T fell 2.1%.

Among automakers, Toyota Motor Corp 7203.T slid 2.4% while Suzuki Motor Corp 7269.T lost 3.3% and Nissan Motor 7201.T 2.8%.

Insurers were among big losers too, with T&D Holdings 8795.T falling 3.9% after U.S. financials underperformed on Wednesday.

About 95% of shares declined in early trade, with all of the Tokyo Stock Exchange's 33 industry subindexes posting losses.

Markets players say the selling was inevitable given many shares had been overbought.

So-called up-down ratio, which measures the number of shares that have risen over the past 25 days against those that have fallen, has risen to 141%, way above 120% mark usually seen as a sign of short-term overheating.

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