Japan's Nikkei slips on fear of escalating U.S.-China tensions

* Tech sector hit by Washington's Huawei ban
* Trading house, oil companies hit by slide in crude prices
* Nikkei on course for 3rd straight week of losses

By Hideyuki Sano
TOKYO, May 24 (Reuters) - Japan's Nikkei share average
dropped on Friday, as concerns about escalating tensions between
Washington and Beijing over trade and technology firms sapped
investor appetite while steep losses in oil prices hit trading
houses.
The Nikkei dropped 0.69% to 21,004 .N225 by midday and is
likely to post its third consecutive week of losses while the
broader Topix .TOPX fell 0.40% to 1,534.36.
"The market mood isn't good. To be sure, there remain hopes
that the two countries' relations could suddenly improve, so a
lot of investors are taking a wait-and-see stance. But it is
hard to deny the situation is deteriorating," said Masayuki
Doshida, senior market analyst at Rakuten Securities.
U.S. President Donald Trump said on Thursday U.S. complaints
against Huawei Technologies Co Ltd HWT.UL might be resolved
within the framework of a U.S.-China trade deal, while at the
same time calling the Chinese telecommunications giant "very
dangerous." Panasonic 6752.T dropped 1.7%, a day after the company
said that it stopped shipments of certain components to Huawei
to comply with U.S. regulations, although its China website said
it continues to supply the Chinese company normally.
Camera maker Canon 7751.T fell 2.8%.
Electronic parts maker Murata Manufacturing 6981.T bounced
back 1.0% after its fall earlier in the session to 2-1/2-year
lows prompted some bargain-hunting. Still, it is down almost 25%
so far this month.
Trading house and energy-related shares were badly hit by
sharp falls in oil prices on Thursday.
Mitsui Co 8031.T fell 1.6% while Mitsubishi Corp 8058.T
dipped 0.3% to hit 1-1/2-year lows.
Although oil prices stabilised on Friday amid OPEC cuts and
Middle East tensions, energy companies saw heavy selling, with
Idemitsu Kosan 5019.T falling 5.0% and Inpex 1605.T 4.9%.
JXTG Holdings 5020.T dropped 4.0%.
Oil prices have suffered their steepest losses so far this
year as trade tensions fanned worries about a major downturn in
the global economy.
On the main board, 52% of shares declined while 42% gained.
Among gainers, Isetan Mitsukoshi 3099.T rose 3.1% on a
media report that the department store operator plans
cost-cutting measures and is considering share buybacks.

(Editing by Jacqueline Wong)