Japan Shares Fall as Tension Builds Following North Korea Test

  • Pyongyang may be readying to fire ICBM: Asia Business Daily
  • Market on alert ahead of another possible missile launch: SBI

Japanese shares declined for a second day as the yen strengthened while investors mulled the global reaction to North Korea’s largest nuclear test to date.

The yen extended its gain against the U.S. dollar after Asia Business Daily reported that North Korea has started moving an ICBM-class missile for a possible launch before Sept. 9. The electronics and telecommunications groups were the biggest drags on the Topix index, which completed its worst two-day drop since May. Volume was below the 30-day average ahead of the settlement price of futures and options known as “special quotation” later this week.

“The stock market will continue to be on alert for geopolitical risks surrounding North Korea toward the weekend,” said Hideyuki Suzuki, a general manager at SBI Securities Co. in Tokyo. “Traders and investors may find it difficult to make a move ahead of the major special quotation on Sept. 8 and North Korea’s possible missile launch around the national founding day on Sept. 9.”

The Stoxx Europe 600 Index fell 0.5 percent overnight following Monday’s decline in Asian equities. The U.S. market was closed for a holiday. U.S. President Donald Trump agreed to support billions of dollars in new weapons sales to South Korea. His ambassador to the United Nations, Nikki Haley, said that the U.S. would seek the strongest possible sanctions against Kim Jong Un’s regime.

Summary

  • Topix -0.8% to 1,590.71 at close in Tokyo, extending Monday’s 1% slide
  • Nikkei 225 -0.6% to 19,385.81
  • Yen +0.4% at 109.34 per dollar after gaining 0.5% Monday
  • Electric appliances group -1%: Sony -1.4%, Murata -1.5%, Nidec -1.7%
  • Telecoms -1.1%: SoftBank -1.7%, Nexon -3.2%
  • Pigeon -7.5%; raised guidance may have disappointed investors, Credit Suisse says 
  • Fuji Oil -1.8%, fell as much as 3.8%; Nomura cuts rating as stock ‘less undervalued’

For more on Japan markets:
Japan Post Said to Announce Trillion-Yen Share Sale Sept. 11
Japan Post’s Share Sales Shake Up More Than the Mail: QuickTake
Japan Must Hold Line on Social Spending, New Labor Minister Says
Toshiba Is Said to Seek Decision on Chip Sale This Week: Asahi

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