Nikkei drops to over 2-week lows as U.S probe hits automakers

  • Reuters
  • Stock Market News
Nikkei drops to over 2-week lows as U.S probe hits automakers
Credit: © Reuters.

TOKYO, May 24 (Reuters) - Japan's Nikkei share average fell to more than two-week lows on Thursday as automakers like Toyota slumped after the Trump administration launched a national security investigation into car and truck imports that could lead to new U.S. tariffs.

The Nikkei .N225 dropped 1.2 percent to 22,425.19 points by midmorning, after falling to 22,389.94, the lowest level since May 9.

The transportation equipment sector .ITEQP.T stumbled 2.6 percent and was the worst performer on the board after news of the U.S. probe. Motor Corp 7203.T fell 2.7 percent, Subaru Corp 7270.T dropped 2.9 percent and Mazda Motor Corp 7261.T dived 4.3 percent.

Nissan Motor Co 7201.T and Honda Motor Co 7267.T shed 1.8 percent and 2.8 percent, respectively.

"Sentiment in the auto sector is bad with the tariff concerns, and a strong yen is pouring salt on the wound," said Takashi Ito, equity market strategist at Nomura Securities.

The dollar shed 0.3 percent to 109.73 yen JPY= in early Asian trade, a day after it had fallen 0.73 percent, its biggest fall in nearly three months.

GS Yuasa 6674.T , which makes automotive lithium-ion batteries with Honda, stumbled 3.3 percent after the Nikkei business daily reported that the automaker will team up with Contemporary Amperex Technology, the world's largest battery maker, to develop electric vehicle batteries that it seeks as key to its global strategy.

Elsewhere, discount clothing chain Shimamura 8227.T dived 5.6 percent after its May same-store sales dropped 7.7 percent on the year due to cold weather.

The broader Topix .TOPX dropped 1.1 percent to 1,778.20.

(Editing by Kim Coghill)

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