June 17, 2019 / 6:49 AM / a month ago

Japanese shares struggle on trade, economic uncertainties

* Technology shares under pressure

* Outlook murky with eyes on trade, Fed

* Domestic demand-related shares shine

* Turnover 30% below average

By Hideyuki Sano

TOKYO, June 17 (Reuters) - Japanese share prices struggled to make headway on Monday as uncertainties over the global economy, U.S.-China trade frictions and the U.S. Federal Reserve's policy stance kept many investors on sidelines.

Japan's Nikkei share average ended 0.03% higher at 21,124, helped by gains in a few of its heavyweights such as SoftBank Group and Fast Retailing.

But the broader Topix fell 0.45% to 1,539.74, with decliners outnumbering advancers by 72-28, while the turnover at the main board dropped to 1.65 trillion yen, more than 30% below the average, reflecting a lack of enthusiasm.

Investors remain unsure how the United States and China can resolve their disputes over tariffs and technology, and uncertain whether U.S. President Donald Trump and Chinese leader Xi Jinping will meet on the sidelines of a Group of 20 summit in Osaka next week.

"The moment you would have a headline that the two won't meet in Osaka, the Nikkei could fall 500 points. Investors would want to raise the ratio of cash as much as possible," said Fujio Ando, advisor at Chibagin Securities.

Soft industrial output data from China on Friday added to the evidence that the economic disputes between the world's two biggest economies are taking toll on growth worldwide.

Most investors now expect the U.S. Fed to drop hints of a future rate cut when its policy makers meet later this week. Yet that could help to strengthen the yen against the dollar, to the detriment of Japanese exporters who earn dollars overseas.

Against this backdrop, investors scurried to shares of companies that cater to domestic demand and have small exposures to the global economy.

Morinaga Milk rose 13.5% to one-year high, helped by a brokerage upgrade, while internet and e-commerce firm Rakuten rose 4.2% to 21-month highs.

In contrast, many technology shares continued to face heavy selling pressure.

Keyence dropped 1.5% while Tokyo Electron shed 2.4%, Nidec 2.2% and Shin-Estu Chemical 1.3%.

Anritsu Corp dropped 2.1%. Its shares had been flying high earlier this year on hopes of 5G equipment demand.

Japan Display fell 7.0% after the embattled display maker said it has received notice from TPK Holding Co Ltd that the Taiwanese flat screen maker has decided against investing in the firm. (Editing by Simon Cameron-Moore)

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