Topix Set for Biggest Two-Day Drop Since March on Trade Worries
Topix Set for Biggest Two-Day Drop Since March on Trade Worries
(Bloomberg) -- The Topix index fell, set for its biggest two-day slide in two months, following a slump in U.S. equities amid ongoing concern over President Donald Trump’s threat to increase tariffs on Chinese imports.
Japan’s benchmark measure slid 1.5 percent as of 9:15 a.m. in Tokyo, while the Nikkei 225 Stock Average lost 1.6 percent. Electronics makers were the biggest drag as all industry groups declined. The yen extended gains against the dollar for a fourth day. The S&P 500 Index fell 1.7 percent while the CBOE Volatility Index, or VIX, rose by the most since December.
China’s government confirmed Tuesday that Vice Premier Liu He will visit the U.S. for trade talks May 9-10. At the same time, the world’s second-largest economy was said to be preparing retaliatory tariffs on American imports should Trump carry out his threat of further duties. Trump’s top trade negotiator on Friday said the U.S. plans to raise tariffs on Chinese goods, accusing Beijing of backpedaling on commitments it made during negotiations.
“It’s unclear how a conclusion will be drawn by the negotiation deadline on May 10 and the market is likely to be swayed this way and that until then,” said Mitsushige Akino, an executive officer at Ichiyoshi Asset Management Co. in Tokyo. As the VIX looks set to climb further, “investors with high exposure to equities are adjusting their positions in the Japanese market.”
To contact the reporters on this story: Min Jeong Lee in Tokyo at mlee754@bloomberg.net;Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Kurt Schussler, Teo Chian Wei
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