Nikkei drops to 3-week low in choppy trade on mixed U.S.-China signals

By Tomo Uetake
TOKYO, Nov 21 (Reuters) - Japanese stocks tumbled on
Thursday on concerns that a U.S.-China "phase one" trade
agreement will be delayed, but losses were pared after China's
top negotiator reportedly expressed optimism that a deal can
still be reached.
The Nikkei share average .N225 fell 0.5% to 23,038.58
points, its lowest close since Nov. 1, after a choppy session.
Analysts said profit-taking set in after the benchmark fell
below both the psychological 23,000 level and the key 25-day
moving average, which last stood at 23,016.
In early trade, the benchmark slid as much as 1.8% to
22,726.72, a three-week low, on concerns a preliminary trade
deal between Washington and Beijing may not be completed this
year. Adding to the tensions between the world's two biggest
economies, the U.S. House of Representatives on Wednesday passed
legislation intended to support protesters in Hong Kong and send
a warning to China about human rights. Bloomberg News reported on Thursday that China's Vice
Premier Liu He said he was "cautiously optimistic" on a phase
one deal. Liu reportedly made the comment in a dinner speech in
Beijing on Wednesday, citing people who attended the event ahead
of a forum organized by Bloomberg LP. Recent gainers, most notably semiconductor-related stocks,
were on the retreat. Tokyo Electron 8035.T dropped 3.4%,
Advantest Corp 6857.T slid 3.9% and Screen Holdings 7735.T
dived 4.4%.
Nikkei heavyweight SoftBank Group 9984.T fell 1.6% after
media reported the tech conglomerate is in talks for a loan of
about 300 billion yen ($2.8 billion) from Japanese banks, led by
Mizuho Financial Group. Mizuho's shares 8411.T
ended flat.
With the Topix index ending the morning session 1% lower,
traders had expected the Bank of Japan's buying should lend some
support to the stock market in the afternoon.
The broader Topix .TOPX recouped most of its early losses
to end down 0.1% at 1,689.38.
BOJ data released late Wednesday showed the central bank
bought exchange traded funds (ETFs) for the first time in six
weeks, apart from its daily purchases of ETFs to support capital
spendings. = 108.4900 yen)