Nikkei snaps 8-day rally as U.S.-China trade worries sap mood

  • Reuters
  • Stock Market News
Nikkei snaps 8-day rally as U.S.-China trade worries sap mood
Credit: © Reuters.

* Nikkei has gained 1 pct for the week

* Falling emerging market currencies saps mood

* Commodity shares weak

By Ayai Tomisawa

TOKYO, Aug 31 (Reuters) - Japan's Nikkei ended an eight-day rally on Friday after U.S. President Donald Trump said he is ready to quickly ratchet up a trade war with China, rattling Asian markets.

The Nikkei share average .N225 shed 0.1 percent to 22,842.18 points by midmorning.

The benchmark index hit the psychologically important mark of 23,000 this week, but has failed to stay above that level at the market close.

The Nikkei looked set for a 1.0 percent gain for the week and a little more than that for the month.

Bloomberg News reported that Trump is prepared to quickly ramp up a trade war with China and has told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week. had expected the move in late September, giving room in theory for further negotiations between Washington and Beijing.

"Investors do not want to take positions now as there is news related to trade friction one after another. There is a possibility that markets will be rocked again," said Fujio Ando, senior managing director at Chibagin Securities.

But he added that losses were limited by expectations that the Bank of Japan may buy exchange-traded funds to support the market, as it has often done in the past.

Analysts also said that drops in emerging market currencies dampened investors' risk sentiment.

Commodity shares lost ground, with steel, non-ferrous metal and shipping stocks underperforming.

Nippon Steel & Sumitomo Metal Corp 5401.T tumbled 2.1 percent, JFE Holdings 5411.T shed 1.4 percent, Sumitomo Metal Mining 5713.T dropped 1.8 percent and Kawasaki Kisen 9107.T declined 1.6 percent.

On the other hand, electronics device maker Fujitsu Ltd 6702.T bucked the weakness, rising 1.7 percent after the company said to buy back up to 22 million of its own shares, 1.08 percent shares outstanding, which is worth up to 18 billion yen.

The broader Topix .TOPX dropped 0.2 percent to 1,735.84.

(Editing by Kim Coghill)

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