Japanese equities fall to their lowest level in a week due to global policy risks and rising yen

TOKYO (Reuters) – Japanese stocks lost more than 1% Tuesday, the first trading day after a long holiday, weighed down by new worries about the US-China trade war, unrest in Hong Kong and a stronger yen which has hurt economic sectors and exporters.

The Nikkei <.N225> was down 1.1% to 20,455.44, its lowest level in a week, while the Topix <.TOPX> widest lost 1.2% to 1,486.57.

With the reopening of the market, investors are looking at the news of the weekend, which have already weighed on the stock markets abroad.

US President Donald Trump said on Friday that he was not ready to reach an agreement with China and even questioned a trade round in September, raising fears over the end of the conflict. .

Goldman Sachs Group said on Sunday that it no longer expected a trade deal between China and the United States before the 2020 US presidential election.

Sentiment was also touched by the protests that are proliferating in Hong Kong, which closed Monday its busy airport.

Of the 33 sub-indices of the Tokyo Stock Exchange, 32 fell, with business cycle-related sectors such as the three sub-indices of petroleum and coal products, steel and mining, topping the list the worst-performing sectors, down 4.5%, 2.9% and 2.8%.

Investor confidence was also affected by the strengthening of the yen, which led to a decline in export inventories, with a 3.6% decline for Subaru and a 3.1% decline for TDK.

On the foreign exchange market, the yen reached 105.05 yen for one dollar over the long weekend. All other factors being equal, the strength of the yen is weighing on the income of Japanese exporters.

Bridgestone fell 3.2% after tire maker forecast annual net profit of 290 billion yen ($ 2.75 billion), down 1% from previous forecast of 300 billion yen, due to slowing demand in North America.