Nikkei hits near 3-month lows as Sino-U.S. trade war fears grow

  • Reuters
  • Stock Market News
Nikkei hits near 3-month lows as Sino-U.S. trade war fears grow
Credit: © Reuters.

* Nikkei ends down 0.1 pct, at one point off 1.1 pct

* Metal companies, shippers hit again on tariff worries

* Mothers index hits a 10-month low

* Some high-tech shares gain after Nasdaq rally

By Hideyuki Sano

TOKYO, July 3 (Reuters) - Japanese shares slipped to near three-month lows on Tuesday in choppy trade on growing worries the new tariffs the United States and China have threatened to impose on each other will kick in at the end of this week.

The Nikkei average .N225 ended down 0.12 percent at 21,785.54. At one point it dropped as much as 1.1 percent to 21,574, its lowest level since mid-April.

"If the U.S. and China start a tit-for-tat battle, the economy will surely suffer and corporate earnings will fall," said Fujio Ando, adviser at Chibagin Securities.

"Should there be auto tariffs, Japanese car exports will shrink considerably, forcing not just carmakers but others such as steel makers and electronics device makers to cut productions," he said.

As investors braced for July 6, when Washington is set to impose tariffs on $34 billion worth of Chinese exports to the United States, few shares were spared from selling.

The broader Topix fell 0.15 to 1,692.80 .TOPX , with decliners outnumbering advancers by 1,541 to 486.

Non-ferrous metal companies .INFRO.T and shippers .ISHIP.T , among the worst hit after U.S. President Donald Trump earlier imposed tariffs on steel and aluminuim products, fell 1.9 and 1.6 percent respectively.

Precision machinery makers .IPRCS.T fell 1.2 percent, with Citizen Watch 7762.T down 3.0 percent.

Mothers start-up shares were badly hit on Tuesday, with its index .MTHR falling 1.1 percent to a 10-month low.

In a sign of expectations of wild price moves, the Nikkei volatility index .JNIV closed at 21.11, the highest in nearly three months.

"It is difficult at this stage to estimate the spill-over effects of the tariffs," said Keita Kubota, senior investment manager at Aberdeen Standard Investments. "But for a long-term investor like us, the current market volatilities should also provide good buying opportunities," he said.

Some technology shares with solid earnings outlook were among few bright spots, as traders took their cue from rise in U.S. high-tech shares on Monday.

Nintendo 7974.T rose 1.9 percent while Keyence 6861.T climbed 1.0 percent. Murata Manufacturing 6981.T gained 1.2 percent.

Start Today 3092.T rose 2.6 percent after the operator of online fashion retailer Zozo said it was expanding its offer of made-to-measure clothes using skintight bodysuits that help customers upload their measurements online. contrast, shares of suit retailers Aoki Holdings Inc 8214.T fell 7.4 percent and Aoyama Trading Co Ltd 8219.T fell 5.5 percent after the news. (Editing by Richard Borsuk)

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