Japan stocks slip to 1-week low on global political risks, firmer yen

By Tomo Uetake
TOKYO, Aug 13 (Reuters) - Japanese shares shed more than 1%
on Tuesday, the first trading day after a long weekend, hurt by
fresh jitters about the U.S.-China trade war, turmoil in Hong
Kong and a firmer yen that hit cyclical sectors and exporters.
The Nikkei share average .N225 fell 1.1% to 20,455.44, its
lowest level in a week, while the broader Topix .TOPX lost
1.2% to 1,486.57.
As the market reopened, investors weighed news over the
weekend, which had already dented overseas share markets.
U.S. President Donald Trump on Friday said he was not ready
to make a deal with China and even called a September round of
trade talks into question, reviving concerns the dispute is
unlikely to end any time soon. Goldman Sachs Group Inc GS.N said on Sunday it no longer
expects a trade deal before the 2020 U.S. presidential election.
Escalating protests in Hong Kong, which caused the shutdown
of its busy airport on Monday, also dampened sentiment.
Of Tokyo's 33 subindexes, 32 were in the red, with cyclicals
such as oil and coal products .IPETE.T , iron and steel
.ISTEL.T and mining IMING.T sub-indexes the top three worst
performing sectors, down 4.5%, 2.9% and 2.8%, respectively.
"While the trade war could quickly get a lot worse, Trump
also has it within his power to let things improve suddenly,
suggesting it is dangerous to be too short cyclicals," said
Nicholas Smith, Japan strategist at CLSA Securities.
The much stronger yen also soured sentiment and dragged down
exporters, with Subaru Corp 7267.T dropping 3.6% and TDK Corp
6762.T slipping 3.1%.
In the currency market, the yen rose as high as 105.05 yen
to the dollar JPY=EBS over the long weekend. All else being
equal, a stronger yen hurts on the profits of Japanese
exporters.
With the busiest part of Japan's April-June quarter earnings
season wrapping up, reaction to earnings continued to dominate
trading on Tuesday.
Bridgestone 5406.T slid 3.2% after the tyre maker forecast
full-year net profit through December would fall 1% to 290
billion yen ($2.75 billion), down from the previous forecast of
300 billion yen, citing a demand slowdown in North America.
JFE Holdings 5411.T tumbled 6.3% after the steelmaker's
operating profit, excluding one-off gains or losses, tumbled 63%
in the April-June quarter. Japan Display Inc 6740.T dived 7.1% after the
cash-strapped liquid crystal display (LCD) maker for smartphones
reported a 10th consecutive quarterly loss and a negative net
worth, hit by weak iPhone sales at Apple Inc AAPL.O .
= 105.43 yen)