Nikkei falls as geopolitical fears on North Korea sap risk appetite

  • Reuters
  • Stock Market News
Nikkei falls as geopolitical fears on North Korea sap risk appetite
Credit: © Reuters.

* Steel sector weak as crude steel output falls

* Nikkei has risen 2.0 pct for the week

* Matsuya tumbles after cutting profit forecast

By Ayai Tomisawa

TOKYO, Sept 22 (Reuters) - Japan's Nikkei share average fell in choppy trade early on Friday, moving away from two-year highs as rising geopolitical tensions over North Korea sapped risk appetite.

South Korea's Yonhap news agency reported North Korean Foreign Minister Ri Yong Ho as saying he believes the North could consider a hydrogen bomb test on the Pacific Ocean of an unprecedented scale. report dented sentiment, erasing earlier gains in the market.

The Nikkei .N225 slipped 0.3 percent to 20,287.09 in midmorning trade, after opening in positive territory. For the week, the Nikkei is still up 2.0 percent.

"The headline about North Korea's nuclear test gave a little shock to the market," said Takuya Takahashi, a strategist at Daiwa Securities. "Though the market is not expecting that there will be an immediate military action, it has triggered a profit-taking opportunity since the Nikkei had risen sharply recently."

The Nikkei hit 20,481.27, its highest level since August 2015 on Thursday on the back of strong gains on Wall Street, a weakening yen and hopes for a snap election.

Steel shares eased on Friday after the Japan Iron and Steel Federation said the country's crude steel output fell 2 percent to 8.73 million tonnes in August from a year earlier due to glitches at some mills. Holdings 5411.T fell 4.4 percent and Nippon Steel & Sumitomo Metal 5401.T dropped 1.8 percent.

Exporters were mixed, with Advantest Corp 6857.T falling 1.6 percent, Panasonic Corp 6752.T shedding 1.0 percent, Suzuki Motor Corp 7269.T declining 1.7 percent. Toyota Motor Corp 7203.T rose 0.3 percent.

Department store operator Matsuya Co 8237.T stumbled 3.8 percent after the company cut its net profit outlook to 250 million yen ($2.2 million) from a previous forecast of 400 million yen for the March-August period. broader Topix .TOPX dropped 0.3 percent, while the JPX-Nikkei Index 400 .JPXNK400 shed 0.2 percent.

($1 = 112.1100 yen) (Editing by Richard Pullin)

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