Tokyo, Aug 6 (AFP/APP):Tokyo stocks opened down nearly three percent Tuesday after Wall Street suffered the worst session of the year on worries about an escalating US-China trade war.
The benchmark Nikkei 225 index fell 2.94 percent or 609.00 points to 20,111.29 in the first few minutes while the broader Topix index was down 2.87 percent or 43.24 points at 1,462.64.
Beijing parried US President Donald Trump’s latest tariff announcements by moving to let the Chinese yuan devalue and halting purchases of US agricultural products.
Trump fired back, formally designating China as a currency manipulator.
Investor sentiment took a hit as the trade war between the world’s two biggest economies escalated quickly.
“After last week’s tariff announcement by President Trump, the market was expecting a reaction from China,” noted Rodrigo Catril, senior strategist at National Australia Bank.
“But based on recent behaviour, there was still some expectation for China to take its time while also aim for a more measured response,” he said in a note.
“In the end, we got a little bit more than anticipated,” he said, with Beijing letting its yuan falling to levels the Chinese authorities had previously been cautious to breach.
“We think it sends a signal that China is gearing up for a long trade battle with the US,” he said.
On Wall Street, the blue-chip Dow Jones Industrial Average sank 2.9 percent in the worst session of the year, the broad-based S&P 500 slumped 3.0 percent and the tech-rich Nasdaq Composite Index tumbled 3.5 percent.