July 18, 2019 / 2:13 AM / a month ago

Nikkei slips to 3-week low as trade worries haunt earnings

TOKYO, July 18 (Reuters) - Japan's Nikkei fell to three-week lows early on Thursday as the country's dismal exports and weak U.S. corporate earnings raised fresh worries about fallout from the Sino-U.S. trade war.

The Nikkei share average fell 1.28% to 21,193.80, hitting its lowest since June 27, while the broader Topix dropped 1.38% to 1,545.91, also hitting three-week lows.

"The earnings of global manufacturers will be soft for now. Investors are on the sidelines and waiting to buy on dips only if the Nikkei falls below 21,000," said Takashi Hiroki, chief strategist at Monex Securities.

Cyclical shares led the losses, with electric machinery shares falling 1.8%. Hitachi was down 2.2% while Panasonic shed 2.1%.

As the U.S. earnings season kicked off, weak results from railway transport company CSX Corp stoked concerns that the protracted trade standoff between the United States and China could hurt the profits of U.S. companies

The outlook is seen even bleaker in Japan as companies struggle with the U.S.-China tariff war amid deteriorating global conditions that have dragged on its exports.

Japan's exports to China dropped more than 10% from a year earlier, its sixth fall in the past seven months, trade data showed on Thursday.

Canon fell 2.8% after the Nikkei business daily reported its operating profit was on track to sink 40% this year.

NOK Corp fell 6.6% after the manufacturer of seal products slashed its earnings outlook, cutting its annual operating profit estimates by 34% on weak sales of car-related products in North America and China.

Elsewhere, Akebono Brake Industry Co Ltd hit limit-high, rising 43% after the troubled car parts maker said it expects to receive investment from a corporate turnaround fund to help restructure its money-losing business. (Reporting by Hideyuki Sano Editing by Jacqueline Wong)

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