Nikkei slips, trading subdued ahead of Jackson Hole, G7 summit

TOKYO, Aug 21 (Reuters) - Japanese shares dropped on Wednesday as fresh worries about a global recession weighed on risk assets, with U.S. President Donald Trump showing no signs of backing down in his trade war with China.

The Nikkei share average took its cue from Wall Street’s selloff overnight and fell 0.4% to 20,596.92 by the midday break. Trading remained subdued as key events due later in the week kept many investors on the sidelines.

In New York, all three major stock indexes retreated on Tuesday to end a three-day rally, with financial shares leading the losses.

Trump said on Tuesday he had to confront China over trade even if it caused short-term harm to the U.S. economy because Beijing had been cheating Washington for decades.

Concerns about Italy’s political chaos and Britain’s tumultuous exit from the European Union also have made investors wary.

The broader Topix shed 0.8% to 1,495.19, with all but one of Tokyo’s 33 subindexes finishing the morning session in negative territory.

A notable mover was benchmark Nikkei’s heavyweight SoftBank Group, which slid 3.0% to become the most traded stock on the main board.

Although there was no fresh negative news from the company, traders said markets are digesting the Wall Street Journal’s weekend report of the firm’s plan to lend employees up to $20 billion to invest in its Vision Fund 2.

Rate-sensitive TSE REIT index eased 0.1%, snapping its eight-day winning streak, but still not far from its 12-year peak.

Looking ahead, investors await comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium on Friday and the Group of Seven (G7) summit, to be held in southwestern France on Aug 24-26. (Reporting by Tomo Uetake; Editing by Simon Cameron-Moore)