[TOKYO] Japan’s Nikkei share average slipped on Wednesday (Apr 9), ending nearly 4 per cent lower in a broad sell-off, as traders gauged concerns over a potential economic slowdown amid an intensifying trade war between the United States and China.
The Nikkei share average fell 3.9 per cent to close at 31,714.03, while the broader Topix dropped 3.4 per cent to 2,349.33.
The index saw significant volatility this week, closing 6 per cent higher on Tuesday after a 7.8 per cent slump on Monday pushed it to a 1½ year low.
The Nikkei extended its losses to 5.3 per cent earlier in the day after US President Donald Trump’s “reciprocal” tariffs on dozens of countries took effect, including massive 104 per cent duties on Chinese goods, deepening his global trade war even as he prepared for negotiations with some nations.
The deepening losses of the Nikkei index were associated with a surge of US Treasury yields in Asia trade, in a sign investors are selling even their safest assets amid the rout, said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
“The markets are now in panic, and any big move could drive a sell-off of risk assets,” said Yasuda.
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In Japan, technology stocks drove the losses on Nikkei, with Advantest and Tokyo Electron falling 7.8 per cent and 6 per cent, respectively.
Technology investor SoftBank Group fell 7.2 per cent.
The yen’s gain against the dollar pressured exporters, with the Japanese currency rising as high as 144.865 yen to the greenback due to safe-haven bets.
A stronger Japanese currency tends to hurt shares of exporters, as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
“Investors are uncertain about how much further the Nikkei could fall. They are trying to find where the bottom is,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
Of the more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 89 per cent saw declines, while 9 per cent posted gains. REUTERS
