Japanese shares fall led by IT sector, as Trump warns of more tariffs

By Stanley White

TOKYO, Nov 20 (Reuters) - Japanese shares fell on Wednesday on worries over the progress of trade talks between Washington and Beijing, with the information technology sector recording the biggest decline led by falls in semiconductor companies.

U.S. President Donald Trump threatened an escalation in the trade war on Tuesday when he said he would raise tariffs on Chinese imports if no deal was reached with Beijing.

The Nikkei index .N225 closed down 0.62% at 23,148.57.

Trump's comments, which he made at a cabinet meeting at the White House, further dented hopes for a resolution to a 16-month long trade war that has curbed global trade. United States and China have exchanged tit-for-tat tariffs that have roiled financial markets and threatened to drag growth in the global economy to its lowest rate since the 2007-2008 financial crisis.

Sticking points include how and when to reduce tariffs and how much U.S. agricultural products China would commit to buy.

"There is a lot of uncertainty about the U.S.-China trade war, including Trump's comments," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co.

"It would certainly benefit both sides to have a trade deal, so I think they will eventually agree to something. But for the time being, it's a good opportunity for some overseas investors to sell stocks and book some profits."

Some traders are also worried about a further deterioration in U.S.-China relations after the U.S. Senate, in a unanimous vote, passed legislation on Tuesday to protect human rights in Hong Kong, which has been rocked by violent protest against Chinese rule of the former British colony. foreign ministry said it strongly condemned the measure.

The IT sector was the biggest decliner, led by Advantest Corp 6857.T , down 2.7%, and a 1.57% decline in shares of Tokyo Electron Ltd 8035.T .

Major exporters Honda Motor Co Ltd 7267.T fell 1.34% and Toyota Motor Corp 7203.T dropped 0.85%.

There were 89 advancers on the Nikkei index against 128 decliners on Wednesday.

The largest percentage losses in the index were cargo shipping firm Nippon Yusen KK 9101.T down 4.18%, followed by life insurer T&D Holdings Inc 8795.T losing 4.02% and oil refining equipment maker JGC Holdings Corp 1963.T down by 3.71%.

The largest percentage gainers in the index were Sumitomo Dainippon Pharma Co Ltd 4506.T up 6.95%, followed by online commerce company Rakuten Inc 4755.T gaining 2.62% and healthcare company M3 Inc 2413.T up by 2.48%.

The Topix index .TOPX fell 0.33% to 1,691.11, its biggest decline since Nov. 14.

The volume of shares traded on the Tokyo Stock Exchange's main board .TOPX was 1.35 billion, compared with the average of 1.25 billion yen in the past 30 days. (Editing by Sam Holmes and Jacqueline Wong)