Nikkei dips as Huawei fallout hits suppliers; Softbank soars

* Murata, TDK, Taiyo Yuden, Tokyo Electron, TDK underperform
* SoftBank jumps after T-Mobile deal for Sprint gets boost
from
FCC

By Ayai Tomisawa
TOKYO, May 21 (Reuters) - Japan's Nikkei slipped on Tuesday
as Washington's blacklisting of Huawei took a heavy toll on
suppliers to the Chinese telecoms equipment maker, but the
downside was limited after the United States temporarily eased
trade restrictions.
The Nikkei .N225 ended 0.1% lower at 21,272.45. It briefly
turned positive after news the U.S. government had temporarily
eased trade restrictions imposed last week on China's Huawei
Technologies Co Ltd HWT.UL . Since the White House added Huawei to a trade blacklist last
week, several global companies have suspended business with the
world's largest telecoms equipment maker.
"We are worried that the move by the U.S. would lead to a
further deterioration of trade tensions between the United
States and China. If the trade worries drag on, Japanese
companies' earnings in the second half will also likely be hit,"
said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
The electric machinery sector .IELEC.T tumbled 1%,
underperforming the overall market. Murata Manufacturing
6981.T shed 1.5%, TDK Corp 6762.T declined 0.9%, while Tokyo
Electron 8035.T slumped 1.9%, Taiyo Yuden 6976.T slid 0.6%
and Hitachi High-Technologies 8036.T dropped 1.7%.
Mizuho Securities estimates that sales to Huawei account for
about 6-8% at these suppliers.
Other cyclical stocks also lost ground, with shippers Mitsui
OSK Lines 9104.T down sharply by 4% and Kawasaki Kisen
9107.T also stumbling 4.1%.
SoftBank Group Corp 9984.T , which has a stake in Sprint
Corp S.N , soared 3.5% after news that T-Mobile US Inc's
TMUS.O $26 billion acquisition of rival Sprint appeared to win
the support of a majority of the Federal Communications
Commission on Monday. Domestic-demand sensitive stocks outperformed as investors
stayed defensive. Realtor Mitsui Fudosan 8801.T rose 1.7%,
while drugmaker Daiichi Sankyo 4568.T gained 1.2%.
The broader Topix .TOPX dropped 0.3% to 1,550.30.
Declining issues outnumbered advancing ones 1,320 to 743.

(Editing by Jacqueline Wong)