Nikkei drops and trade tensions between America and China hurt morale

Economy and stock exchange

The benchmark Tokyo Stock Exchange closed lower on Monday as most of the economic-related stocks fell after the US-China trade war escalated, as sentiment was dampened by the decline in US equity futures.

The Nikkei fell 0.7% to end at 21191.28, the lowest close since 28 Maras, and the broader TOPIX index shed 0.5% to 1,541.14 points.

Trade negotiations between the United States and China appeared to have reached a stalemate, with Washington asking for concrete changes in Chinese law, and Beijing said it would not accept to the detriment of its interests.

In early trading, Nikkei fell as much as 1% and the Topix was near its lowest level in February, but the sell-off eased as investors digested the events and decided it was too early to assess the latest developments in the US-China trade talks at this stage.

Meanwhile, White House Economic Adviser Larry Kudlo said on Sunday that US President Donald Trump and his Chinese counterpart Xi Jinping will likely meet at the G20 summit in Japan at the end of June and discuss trade issues.

The biggest losers were ships and machinery companies, Kawasaki Cissin down 1.7%, Yaskawa Electric down 3.6% and Komatsu down 1.9%.