Tokyo stocks close lower after US exit from Iran deal

Tokyo stocks close lower after US exit from Iran deal
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Tokyo: Tokyo stocks closed lower on Wednesday as investors digested the impact of US President Donald Trump’s withdrawal from the Iran nuclear deal and fast-moving diplomacy on North Korea.

The benchmark Nikkei 225 index fell 0.44 percent, or 99.81 points, to 22,408.88, while the broader Topix index closed down 0.39 percent, or 6.91 points, at 1,772.91.

The US president rejected appeals by Washington’s closest allies and pulled out of a deal he has called “disastrous”.

“The United States will withdraw from the Iran nuclear deal,” Trump said in a White House address Tuesday US time, branding the landmark 2015 accord endorsed by Britain, China, Germany, Russia and Barack Obama’s administration “defective at its core”.

Geopolitical concerns pushed investors to dump shares, but a weaker yen still created opportunities for some players to hunt for bargains, said Okasan Online Securities.

Analysts said North Korean leader Kim Jong Un would be closely watching Trump’s decision.

Trump “may be using Iran as an example for North Korea to send a message that it will face tough results unless it listens to him”, said Kyoko Amemiya, senior market advisor at SBI Securities.

Chinese President Xi Jinping met Kim in China for the second time in six weeks on Tuesday and later spoke to Trump, as the North Korean and US leaders prepare for a historic summit.

But the market had little reaction to talks between Japanese Prime Minister Shinzo Abe, South Korean President Moon Jae-in and Chinese Premier Li Keqiang in Tokyo on North Korea and economic relations.

The three men stressed that they were cooperating to bring peace to the Korean peninsula.

Investors embraced Toyota’s announcement of a $23 billion record, which came thanks to a weak yen and US tax cuts.

Until early afternoon, Toyota shares hovered in negative territory but the announcement sent them surging 3.76 percent to 7,424 yen by the close.

SoftBank, which said its net profit dropped 27 percent, ended down 0.78 percent at 8.555 yen.

Takeda dropped 2.35 percent to 4,529 yen after it announced a $62.5 billion deal to buy Irish drugmaker Shire.

The dollar fetched 109.60 yen, against 108.98 yen in New York late Tuesday.

AFP