TOKYO: Japanese stocks fell as Chinese markets extended a rout that drove global equities lower and damped investor demand for firms that rely on China for sales.
Murata Manufacturing Co., an electronics maker that gets 57 percent of sales from China and Taiwan, lost 1.4 percent. Machinery-maker Komatsu Ltd. dropped 1.5 percent. Exporters declined after the yen strengthened the most in nearly three weeks against the dollar. Toyota Motor Corp. dropped 1 percent to be the biggest drag on the Topix index. Japan Exchange Group Inc. jumped 3 percent after first-quarter operating profit rose 38 percent.
The Topix index lost 0.5 percent to 1,629.75 as of 12:44 p.m. in Tokyo, paring losses of as much as 1.6 percent. The Nikkei 225 Stock Average declined 0.3 percent to 20,290.05. The Shanghai Composite Index dropped 1 percent after sinking 8.5 percent on Monday, triggering a sell-off in global shares and extending a slump in commodity markets.
“The huge declines in Chinese share prices caused market sentiment to wither and triggered risk-off on a global scale,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo.
Monday’s rout, which was the biggest crash in Chinese shares in eight years, led equities lower worldwide and selling spread to the dollar as the turmoil bolstered speculation that the Federal Reserve will keep U.S. interest rates lower for longer. The yen traded 123.46 per dollar after strengthening Monday by the most against the greenback since July 8, when the previous rout in Chinese markets abated.
