Tokyo stocks closed lower on Monday, with investors wary about renewed trade tensions between the United States and China after talks failed to achieve a deal. The benchmark Nikkei 225 index lost 0.72 percent or 153.64 points to end at 21,191.28, while the broader Topix index was down 0.53 percent or 8.28 points at 1,541.14.
US President Donald Trump on Sunday defended his tariff policy, insisting again that China will pay billions in duties to the US, after Trump's economic advisor raised eyebrows by saying both sides will suffer. "We are right where we want to be with China," Trump said on Twitter.
"Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China." Trump had accused Beijing of reneging on its commitments in trade talks and ordered new punitive duties, which took effect Friday, on $200 billion worth of Chinese imports, raising them to 25 percent from 10 percent. He then ordered a tariff hike on almost all remaining imports from China, which are worth about $300 billion, according to US Trade Representative Robert Lighthizer.
China responded that it would be forced to retaliate, without specifying how. "The US-China talks are continuing without breakoff but it is difficult to see a deal being struck in the short term," Masayuki Kubota, chief strategist at Rakuten Securities, said in a commentary. "If the US and China keep increasing tariffs, it is likely to have a negative impact on the global economy," he said.
"The Nikkei index is likely to be affected by the trade fears." Investors are also watching a series of Chinese and US data due on Wednesday, including Chinese retail sales in April. The dollar fetched 109.70 yen in Asian trade, against 109.96 yen in New York on Friday.
In Tokyo, China-related shares were lower, with electronic parts maker Rohm dropping 4.37 percent to 7,220 yen and construction machine maker Komatsu down 1.92 percent to 2,374 yen. Toshiba fell 0.69 percent to 3,580 yen after the company said its net profit jumped 26.0 percent to 1.01 trillion yen but operating profit plunged 58.9 percent. Panasonic fell 2.58 percent to 892 yen while Sony lost 0.68 percent to 5,371 yen. SoftBank Group was down 3.24 percent to 10,570 yen after the disappointing IPO of Uber. SoftBank Group has a 16 percent stake in the ride-hailing firm.
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