Japan's Nikkei closes at three-month low
UPDATE: US-China trade tensions take their toll although some recoveries suggest slide may be less prolonged than feared
Japan's Nikkei stooped to a three-month low on Tuesday, as investor sentiment took a further hit after China defied Washington by announcing retaliatory tariffs, dragging most sectors into negative territory.
China said it would impose higher tariffs on $60 billion in US goods despite President Donald Trump's warnings not to retaliate against additional tariffs on Chinese imports announced by the White House on Friday.
The Nikkei share average ended the day down 0.59 per cent at 21,067.23 after falling to as low as 20,751.45, the lowest since mid-February.
"Investors are concerned how much damage the trade war will cause on Japan's real economy and financial market," said Shusuke Yamada, vice president and chief Japan FX strategist at Bank of America Merrill Lynch.
Car makers came under pressure. Mazda Motor slid 2 per cent and Subaru fell 2.3 per cent.
Nissan fell 2.95 per cent after the Nikkei business daily reported that the car maker will likely experience its fourth straight year of decreasing profits in the financial year through March 2020.
But traders added that with signs of the market being oversold, some short-term investors were covering earlier shorts.
Komatsu, with a large exposure to China, ended up 0.55 per cent after slumping 4 per cent earlier. Fanuc was up 0.1 per cent after dropping 2.9 per cent and Yaskawa Electric rose nearly 1 per cent after sliding 4.5 per cent.
Large telecommunication companies, considered defensive shares, gained amid the drop in the broader market. Nippon Telegraph and Telephone Corp rose 1.9 per cent and KDDI Corp climbed 2.4 per cent.
The broader Topix shed 0.4 per cent to 1,534.98, after falling to a more than four-month low of 1,508.85.
Small cap markets also lost ground, with the Mothers index sliding 1.96 per cent and the Jasdaq market shedding 0.59 per cent.
Updated: May 14, 2019 11:00 AM