BCN-43 Tokyo stocks close lower on higher yen, trade worries

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BCN-43

STOCKS-MARKETS-JAPAN-CLOSE

Tokyo stocks close lower on higher yen, trade worries

TOKYO, July 20, 2018 (BSS/AFP) – Tokyo stocks closed lower on Friday on a
higher yen, with investors cautious ahead of the beginning of Japan’s
corporate earnings season and worries lingering over trade frictions.

The benchmark Nikkei 225 index lost 0.29 percent, or 66.80 points, to
close at 22,697.88.
Over the week, however, the index edged up 0.44 percent.

The broader Topix index was down 0.26 percent, or 4.61 points, at
1,744.98. Over the week, it advanced 0,86 percent.
“The yen is edging higher while the Chinese yuan dropped,” with both
factors weighing on Japanese shares, Hiroaki Hiwata, strategist at Toyo
Securities, told AFP.

“Ahead of corporate earnings season starting next week, investors are
evaluating the impact” of various factors, including currency rates, on
profits, Hiwata added.

The Chinese currency continued its sharp decline on Friday despite US
President Donald Trump’s bid to rein in the dollar.

In excerpts of an interview with US television network CNBC aired
Thursday, Trump said a strong dollar “puts us at a disadvantage”, adding that
the Chinese yuan “has been dropping like a rock”.

Those and other Trump comments criticising Federal Reserve interest rate
hikes caused the dollar to fall back in the US on Thursday.

But the yuan declined further Friday as the People’s Bank of China (PBOC),
which sets the yuan’s daily trading band, weakened the rate by the widest
amount in two years.

A cheaper yuan helps Chinese-made goods become cheaper and more
competitive in foreign markets, potentially expanding the US trade deficit
with China.

In Tokyo, semiconductor-related shares dropped, with Advantest closing
down 3.16 percent at 2,444 yen and Tokyo Electron ending down 2.97 percent at
18,755 yen.

China-linked shares also suffered, with construction machinery maker
Komatsu falling 2.06 percent to 3,179 yen and industrial robot maker Fanuc
slipping 0.95 percent to 21,155 yen.

BSS/AFP/HR/13