Nikkei slides on US protectionism fears, Tillerson dismissal


TOKYO: Japan’s Nikkei share average slid on Wednesday, ending a four-day winning streak, amid fears of rising US protectionism after President Donald Trump fired his secretary of state and reportedly is eyeing hefty tariffs on Chinese imports.

Leading the drop were chip-related stocks, while shares of companies linked with defence attracted buying.

The Nikkei ended 0.9 per cent lower to 21,777.29, but stayed above its 25-day moving average of 21,672.57.

The broader Topix declined 0.5 per cent to 1,743.21, with 28 of its 33 subsectors falling. Volume was thin, with only 1.15 billion shares changing hands, the lowest level since late December.

Trump fired Tillerson on Tuesday after public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo.

Separately, Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said on Tuesday.

Short-term investors looked for bargains in recently-battered defense equipment stocks on speculation that the appointment of hawkish Pompeo could raise geopolitical tensions.

Ishikawa Seisakusho jumped 7 per cent, Howa Machinery surged 5.8 per cent and Shigematsu Works advanced 1.6 per cent.

Chip-related stocks, which had gained recently, lost ground, with Advantest sliding 2.2 per cent while Sumco and Tokyo Electron both fell 1.9 per cent.

Source: Economic Times