Tokyo stocks fall on concern over US tariffs on global economy

TOKYO (Kyodo) — Tokyo stocks ended lower Monday on concern over the adverse impact of higher U.S. levies on the global economy, but losses were limited by hopes for progress in tariff talks between Japan and the United States.

The 225-issue Nikkei Stock Average fell 110.06 points, or 0.28 percent, from Friday at 39,459.62. The broader Topix index finished 0.43 point, or 0.02 percent, lower at 2,822.81.

On the top-tier Prime Market, decliners were led by information and communication, air transportation and land transportation issues.

The U.S. dollar briefly weakened to the upper 146 yen zone in Tokyo as the Japanese currency, seen as a safe-haven asset, was bought as stocks declined, dealers said. It later returned to the lower 147 yen level amid the lack of fresh trading cues.

The stock market was pressured by concern about the prospects for the global economy as U.S. President Donald Trump said Saturday that he plans to impose 30 percent tariffs on imports from the European Union and Mexico starting on Aug. 1.

But the market found some support after Trump said Sunday that Japan and other major trading partners are changing their approach to tariff talks “very, very rapidly,” indicating he believes there may soon be progress toward agreements.

“Although Trump has been taking a hardline stance over his tariff policy, his latest remark likely fueled hopes that there might be some progress in Japan-U.S. negotiations,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

Meanwhile, some investors took to the sidelines ahead of the House of Councillors election on Sunday, amid caution that Japan’s fiscal health might worsen if the ruling coalition loses its majority in the upper house, brokers said.