TOKYO: Japanese stocks fell after a rout in Chinese markets drove global equities lower, damping investor demand for firms that rely on China for sales.
Murata Manufacturing Co, an electronics maker that gets 57 per cent of sales from China and Taiwan, lost 2 per cent. Chain store-operator Laox Co, which sells about 70 per cent of its appliances to Chinese tourists, dropped 4.1 per cent. Exporters declined as the yen strengthened the most in nearly three weeks against the dollar. Toyota Motor Corp dropped 1.7 per cent to be the biggest drag on the Topix index. Canon. Inc. gained 0.7 per cent after earnings at the camera maker beat estimates.
The Topix index lost 1.3 per cent to 1,616.77 as of 9.36am in Tokyo, with all but two of its 33 industry groups falling. The Nikkei 225 Stock Average declined 1.2 per cent to 20,115.04. The Shanghai Composite Index sank 8.5 per cent yesterday, 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. “We could see a rebound today if Chinese shares recover, but market sentiment is very wobbly and it’s hard to say we’ll definitely see bottom-fishing.”
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 US interest rates lower for longer. The yen traded 123.19 per dollar after strengthening yesterday by the most against the greenback since July 8, when the previous rout in Chinese markets abated.
