Tokyo shares tumble on weak U.S. data, Trump tariff threat against Europe

By Tomo Uetake
TOKYO, Oct 3 (Reuters) - Japanese shares took a battering on
Thursday, with the benchmark Nikkei falling 2%, after a private
sector jobs report in the United States offered fresh evidence
that the trade war with China is taking a toll on the economy.
Compounding investor anxiety, Washington opened a new front
in its trade war with Europe, driving the Nikkei share average
.N225 down 2.0% to 21,341.74, its lowest closing since
September 9. The broader Topix .TOPX lost 1.7% to 1,568.87,
also more than a three-week low.
On Wednesday, data showed hiring by U.S. private employers
had cooled in September, another worrying signal after a report
on Tuesday showing U.S. September factory activity contracted by
the most in more than a decade. Global markets were also rattled after Washington said it
will slap 25% tariffs on French wine, Italian cheese and
single-malt Scotch whisky, in retaliation for European Union
subsidies on large aircraft, threatening to trigger a
tit-for-tat trans-Atlantic trade war. "While direct impacts on Japanese shares should be limited,
markets are looking at them in terms of whether the world is
heading further to protectionism, which will be bad for the
global economy," said Masayuki Kubota, chief strategist at
Rakuten Securities.
While all of Tokyo bourse's 33 sector subindexes finished
in negative territory, cyclical shares led Thursday's losses,
with mining .IMING.T falling 3.7% and transport equipment
makers .ITEQP.T losing 2.5% as investors fret about a possible
U.S. recession.
Among automakers, Toyota Motor Corp 7203.T slid 2.5% while
Suzuki Motor Corp 7269.T dived 4.0% and Nissan Motor 7201.T
was down 2.6%.
Markets players say the selling was inevitable given many
shares had been overbought.
So-called up-down ratio, which measures the number of shares
that have risen over the past 25 days against those that have
fallen, rose to 141% on Wednesday, way above 120% mark usually
seen as a sign of short-term overheating.
Nikkei heavyweight Fast Retailing 9983.T slumped 3.9%
after the company said its same-store sales fell 4.2% in
September from a year earlier. Bucking the broader market, Nitori Holdings 9843.T jumped
2.2% after the discount furniture store operator said sales rose
6.6% to 321.6 billion yen for the March-Aug period. Elsewhere, interest rate-sensiive TSE REIT index .TREIT
gained 0.3% as falling Japanese government bond yields have
increased the demand.