Nikkei: Nikkei slips from 2-yr highs as tech shares fall; North Korea concerns weigh

TOKYO: Japan’s Nikkei average edged lower on Tuesday as tech shares and Apple suppliers declined, tracking their US counterparts overnight, while concerns over North Korea sapped risk appetite.

The Nikkei ended 0.3 per cent lower at 20,330.19, moving away from a two-year high of 20,481.27 hit last week. The broader Topix was flat at 1,672.74.

The escalating war of words between North Korea and the United States lifted investor appetite for the perceived safe-haven yen. The dollar was at 111.63 yen after coming off a high of 112.530 the previous day. North Korea’s foreign minister said US President Donald Trump had declared war on the country and it reserved the right to take countermeasures, including shooting down US bombers even if they are not in its airspace.

“Although the market has become immune to such geopolitical tensions, as the Japanese market was enjoying gains from last week, the latest remarks have provided a reason to take profits,” said Takuya Takahashi, a strategist at Daiwa Securities.

Tracking weak US tech shares, chip-related stocks Advantest Corp and Tokyo Electron Ltd tumbled 2.3 per cent and 2.7 per cent, respectively.

Apple suppliers Murata Manufacturing Co declined 2.9 per cent, Taiyo Yuden stumbled 5.4 per cent, while Nitto Denko dropped 2.0 per cent, after Apple Inc fell overnight following a report that the company had told suppliers to scale back shipments of parts for its upcoming iPhone X.

Bucking the weakness, Nippon Telegraph and Telephone Corp rose 2.3 per cent after the company said that it will buy back up to 30 million of its own shares, or 1.5 per cent of outstanding stocks.

Japan Post Holdings Co rose 1.0 per cent to 1,363 yen after it set the price for its follow-up share sale at 1,322 yen per share, a 2 per cent discount to Monday’s closing price of 1,349 yen. [

In a rare move, the Tokyo Stock Exchange on Monday corrected the date from which it will include Japan Post shares in the Topix index. It said it would include the shares of Japan Post in the Topix on Sept. 29, changing from Oct. 30 that it initially announced.

The exchange’s guidelines say it will add new shares to the index on the share delivery date, which was Sept. 29 for the Japan Post deal, but the exchange made an “anomaly announcement” to allow fund managers and securities firms enough time for index rebalancing.

The TSE said its initial announcement caused confusion among market participants who were preparing index adjustments based on its usual guidelines.

“We decided to change to Sept. 29 after they expressed their concerns,” said Kazuhiro Nishimukai, director of information services at the Tokyo Stock Exchange.

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