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Japan's Nikkei fell on Wednesday as chip-related stocks tracked weakness in their US counterparts overnight and as machine tool makers weakened after downbeat industry data. The Nikkei share average was down 0.4 per cent at 22,571.76 points by the midday break, after rising 1.3 per cent to a one-week high on Tuesday.
Worries about escalation in the Sino-US trade war and the outcome of US-Japan trade talks also added to the gloomy mood. “There is so much uncertainty over global trade issues. We want to first know how Japan's key auto industry will be affected,” said Kazuhiko Suzuki, a strategist at Shinkin Asset Management.
US-Japan trade talks
A source told Reuters on Wednesday that Japanese Economy Minister Toshimitsu Motegi and US Trade Representative Robert Lighthizer will likely hold a second round of trade talks on September 21 in the United States.
Their meeting is planned to precede an expected summit between Prime Minister Shinzo Abe and President Donald Trump on the sidelines of a UN General Assembly General Debate starting September 25, the source said.
Chip-related stocks were under pressure after the Philadelphia SE Semiconductor Index dropped 1 per cent overnight. Semiconductor device maker Rohm Co dived 9.9 per cent to hit a one-year low, while high-purity silicon maker Sumco Corp stumbled 7.8 per cent and Advantest Corp dropped 3.2 per cent.
Machine tool makers stumbled after the Japan Machine Tool Builders' Association said machine tool orders for overseas markets in August dropped 4.4 per cent on the year. Tsugami Corp dived 6.6 per cent, Okuma plunged 5.2 per cent, DMG Mori dropped 3.0 per cent and Makino Milling Machine shed 2.2 per cent.
Struggling consumer electronics maker Pioneer Corp was extremely volatile, soaring as much as 6.2 per cent before ending the morning session down 9.3 per cent. Pioneer said it had secured up to ¥60 billion ($540 million) in funding from Hong Kong-based fund manager Baring Private Equity Asia (BPEA).
“Pioneer's life was extended through the funding for now, but it's unclear how the company's is trying to survive and which profitable core business it has,” said a fund manager at a Japanese asset management firm.
The broader Topix shed 0.7 per cent to 1,686.64.
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