Tokyo stocks drop on concern over changing US tariff policies
TOKYO (Kyodo) -- Tokyo stocks fell Monday on selling fueled by growing concerns over ever-changing U.S. tariff policies after President Donald Trump announced a doubling of levies on steel and aluminum.
The 225-issue Nikkei Stock Average ended down 494.43 points, or 1.30 percent, from Friday at 37,470.67. The broader Topix index finished 24.28 points, or 0.87 percent, lower at 2,777.29.
On the top-tier Prime Market, decliners were led by rubber product, precision instrument and transportation equipment issues.
The U.S. dollar weakened to around the 143 yen line in Tokyo as the Japanese currency, seen as a safe-haven asset, was bought on growing worries about U.S.-China trade tensions after Trump accused China of violating a trade deal, dealers said.
Stocks dropped as fears of a global economic slowdown grew after Trump said Friday that he will raise tariffs on steel and aluminum imports to 50 percent from 25 percent imposed by his administration earlier this year.
"The flip-flops in his policy make it difficult for companies to make investment decisions in the long run, possibly causing them to hold back on capital spending," said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
In addition to Trump's announcement of higher tariff rates on steel and aluminum, the concerns over rekindled U.S.-China trade frictions also weighed on the market, brokers said.
"The optimistic mood in May likely changed this month," as prolonged uncertainty will increasingly weigh on the economy and have a negative impact on risk assets, Yamaguchi said.
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