Tokyo stocks open lower on worries over trade, Iran

An electronic stock board reflects pedestrians outside a securities firm in Tokyo. Photographer: Shoko Takayasu/Bloomberg

TOKYO: Tokyo stocks opened lower on Monday, weighed down by the US-China trade row ahead of this week’s G20 summit and concerns over an escalation in US-Iran tensions.

The benchmark Nikkei 225 index was down 0.27% or 57.89 points at 21,200.75 in early trade, while the broader Topix index dropped 0.22% or 3.45 points to 1,542.45.

“The G20 summit this weekend in Osaka is attracting a lot of attention, with particular interest in the US-China summit talks” on the side-lines of the gathering, Hirokazu Kabeya, chief global strategist at Daiwa Securities, said in a commentary.

Investors were keenly watching if the trade talks that were suspended in May will resume with the talks between US President Donald Trump and Chinese leader Xi Jinping, he said.

Worries over “the intensifying Middle East situation and a higher yen (are expected to) weigh on the market,” added Yoshihiro Ito, chief strategist at Okasan Online Securities.

Trump on Saturday pledged to hit Iran with “major” new sanctions as Tehran warned Washington that any attack would see its interests across the Middle East go up in flames.

The war of words heated up after Trump had pulled back from military action against Iran in response to its downing of a US reconnaissance drone.

Meanwhile, a Yemeni rebel attack on a civilian airport in southern Saudi Arabia killed a Syrian national and wounded seven civilians Sunday, a Riyadh-led coalition said, the latest in a series of strikes on the site.

The coalition did not provide details on how the airport was attacked, but Iran-aligned Huthi rebels have repeatedly struck the civilian facility this month with drones and missiles.

Saudi Arabia has repeatedly accused Iran of supplying sophisticated weapons to the rebels.

Tehran denies the charge.

The dollar fetched 107.38 yen in early Asian trade, down from 107.60 yen in New York on Friday.

In Tokyo, chip-related shares were among the losers, with chip-making equipment manufacturer Tokyo Electron trading down 2.02% at 14,757 yen and chip-testing equipment maker Advantest down 0.18% at 2,724 yen.

Electronic parts maker Rohm was down 0.71% at 6,950 yen while Mitsubishi Heavy Industries was down 0.37% at 4,762 yen.

On Wall Street, the Dow ended down 0.1% to 26,719.13.