October 4, 2019 / 3:38 AM / 11 days ago

Nikkei hits 3-1/2-wk lows on growth fears; banks down on lower Treasury yields

TOKYO, Oct 4 (Reuters) - Japanese shares edged down on Friday, with financials leading the losses, after a soft U.S. service sector survey fanned growth worries and boosted the safe-haven yen.

The downbeat U.S. economic news adds to a set of weak data earlier in the week, and has deepened fears that the U.S.-China trade war is starting to hurt growth in the world's biggest economy.

The benchmark Nikkei average shed as much as 0.3% to hit its lowest level since Sept. 9 and ended the morning session at 0.1% lower at 21,321.99.

The index was on track to post the biggest weekly loss in two months, down 2.6% so far this week.

The survey from the U.S. Institute for Supply Management (ISM) showed its non-manufacturing activity index falling to the lowest level in more than three years in September, and far below expectations.

The data sent the Treasury yields lower across maturities and the dollar to one-month lows of 106.48 against the yen in U.S. trade.

In Tokyo, financial stocks came under pressure, with banking and insurance sectors among the worst performers, down 1.2% and 0.9%, respectively.

Lower U.S. interest rates squeeze banks' lending margins and interest income as Japanese banks and insurance companies have stepped up investments in the United States in recent years.

The broader Topix fell 0.3% to 1,564.62 by the midday break, with all but four of its 33 subindexes trading in negative territory.

Still, many investors remained on the sidelines ahead of a key U.S. jobs report that could help determine whether the Federal Reserve cuts interest rates further.

The data due later on Friday are forecast to show the U.S. economy added 145,000 new jobs in September, more than an increase of 130,000 in the previous month. (Reporting by Tomo Uetake; Editing by Shri Navaratnam)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below