Japan stocks slip as tariff comments dent trade deal optimism

* Nikkei snaps 3-day winning streak on profit-taking
* U.S. comments on China tariff spark caution on deal

By Hideyuki Sano
TOKYO, Jan 15 (Reuters) - Japanese shares dropped on
Wednesday, snapping a three-session winning streak after a top
U.S. trade official said current tariffs on Chinese goods would
stay for now, prompting investors to lock in profits from recent
gains.
The Nikkei share average .N225 fell 0.45% to 23,916.58,
retreating from a four-week high of 24,060 touched the previous
day, while the broader Topix .TOPX lost 0.54% to 1,731.06.
U.S. Treasury Secretary Steven Mnuchin and Trade
Representative Robert Lighthizer said there was no agreement in
place with China on further tariff reductions, taking the shine
out of market enthusiasm about the upcoming trade deal.
The details of the deal are slated to be unveiled at 11:30
a.m. (1630GMT) when the two countries officially sign off on it.
Investors took profits from recent gainers such as Sony
6758.T , SoftBank 9984.T and Keyence 6861.T , which fell
1.9%, 1.4% and 1.2% respectively.
The Nikkei has rallied nearly 20% from its August low on
hopes of a truce in the tariff dispute.
But upcoming earnings announcements pose a hurdle as the
rally has been driven by a rise in P/E, rather than actual
earnings.
The Topix now trades at 14 times over the expected earnings,
the highest multiple in almost two years, compared to around 12
just a few months ago.
Expected earnings have declined a little during this period,
although they have shown some signs of bottoming out.
"I think the market has already priced in a pretty good
scenario. I doubt there will be much upside even if earnings
come out pretty strong," said Takuya Hozumi, global investment
strategist at Mitsubishi UFJ Morgan Stanley Securities.
Toho 9602.T fell 5.7% to become the top decliner on the
Nikkei after the film and entertainment company's earnings in
the three months to January fell short of investors' strong
expectations.
Ryohin Keikaku 7453.T fell 3.2% in extremely heavy trade
for a second day after the operator of Muji brand shops cut its
earnings forecast due to a slump in South Korea and Hong Kong
businesses.
More Japanese companies will announce earnings next month.
Square Enix Holdings 9684.T dropped 4.9% after the game
company announced a delay in the launch of a new game.
On the other hand, Aeon 8267.T rose 1.9%, extending gains
after the retailer announced the first change in its top
leadership in 23 years.
Olympus 7733.T rose 2.3% to a record high amid bullish
view on its medical equipment business.