Tokyo’s benchmark Nikkei 225 index yesterday closed lower, ending the year with its first annual loss since 2011, as negative factors including US-China trade tensions weighed on the market.
The bellwether index lost 12.1 percent from a year earlier to end at 20,014.77 in roller-coaster trade, while the broader TOPIX was down 17.8 percent this year at 1,494.09.
The Nikkei 225 index surged to a 27-year high in October on a cheap yen and rallies on Wall Street, but has since rolled downslope. The index on Tuesday lost more than 5 percent to have the worst finish since April last year.
Yesterday alone, the Nikkei lost 0.31 percent and the TOPIX fell 0.5 percent as investors cashed in ahead of the New Year holidays.
The Tokyo markets are not to resume trading until Friday next week.
The Nikkei last ended the year with a loss in 2011, when a massive earthquake and tsunami hit the world’s third-largest economy.
However, it had scored annual rises since then, for which analysts credit Japanese Prime Minister Shinzo Abe’s so-called “Abenomics” economic strategy.
“The Nikkei scored annual gains for the past six years under Abenomics, but it is not the case any more,” Tokai Tokyo Research Center Co Ltd market analyst Makoto Sengoku said.
“This is because of large swings caused by the Trump administration rather than domestic problems,” he said, adding that US President Donald Trump’s trade spat with China weighed particularly on the market.
Japan “cannot be unaffected when the world’s two biggest economies are fighting,” he said.
Naoki Fujiwara at Shinkin Asset Management Co Ltd said that the market is still forecast to recover the recent losses “once the US-China trade war and Brexit can be settled.”
Japanese corporate activity remains solid at least for now, which could invite buy-backs sometime next year, he added.
Fresh government data released yesterday confirmed Japan’s job market remains tight, with unemployment staying low at 2.5 percent for last month.
Factory output last month turned down 1.1 percent from the previous month, but the drop had been widely expected after an October rise in production.
Elsewhere in Asia, investors moved cautiously yesterday, with the Hang Seng index gaining 0.1 percent, or 25.32 points, to close at 25,504.2.
The benchmark Shanghai Composite Index added 0.44 percent, or 10.81 points, to 2,493.9. The Shenzhen Composite Index, which tracks stocks on China’s second exchange, fell 1.22 percent, or 15.56 points, to 1,264.23.
In Sydney shares were up 1 percent, Bangkok gained 0.3 percent and Seoul’s KOSPI gained 0.6 percent.
In the commodity markets, oil rebounded by as much as 3 percent in Asian trade after rising US crude inventories pushed prices lower in the previous session — underscoring concerns that a supply glut would continue to weigh down on the market.
Gold prices reached US$1,276.83 an ounce, the highest in more than six months.
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