Japanese shares slip as strong yen, Middle East woes dim mood

* Nikkei loses 0.43%, Topix sheds 0.27%
* Yen rises to 6-mth high vs dollar, weighs on blue chip
exporters
* Trading volume low ahead of Trump-Xi meeting at upcoming
G20

By Shinichi Saoshiro
TOKYO, June 25 (Reuters) - Japanese shares retreated on
Tuesday as the combination of the yen's rise to a near six-month
high versus the dollar and brewing U.S.-Iran tensions hit
exporters and curbed risk appetite.
The Nikkei ended the day down 0.43% at 21,193.81.
Tensions between the United States and Iran remained high,
with Tehran saying that a U.S. decision to impose sanctions on
the country's supreme leader and other top officials permanently
closed the path to diplomacy. The tense backdrop underpinned the safe-haven yen JPY= ,
which stretched its gains to 106.780 per dollar - its strongest
since the start of January.
Shares of blue-chip exporting companies sagged on the yen's
appreciation.
Toyota Motor Corp 7203.T lost 0.6%, Honda Motor Co
7267.T was down 0.7%, Hitachi Ltd 6501.T dropped 1.1% and
Tokyo Electron 8035.T fell 3.3%.
Ahead of the June 28-29 G20 summit in Japan, overall selling
pressure was relatively limited. At 1.73 trillion yen, turnover
for the broader Topix .TOPX was not much higher than Monday's
1.4 trillion yen, which was the lowest since December 2014.
U.S. President Donald Trump and Chinese President Xi Jinping
will discuss trade issues at the G20 in their first face-to-face
meeting since trade negotiations broke down in May.
"A major breakthrough in trade talks is unlikely but the
United States and China might agree to keep the dialogue going
at the G20. That could be enough to fuel 'risk on'," said
Takashi Hiroki, chief strategist at Monex Securities.
Shares of companies related to national defence gained after
a report that Trump had recently spoken privately about
withdrawing from the defence treaty with Japan. Defence equipment maker Ishikawa Seisakusho Ltd 6208.T
rose 8.5%, Howa Machinery Ltd 6203.T , which makes firearms,
gained 3.5% and flare manufacturer Hosoya Pyro-Engineering Co
4274.T advanced 6.4%.
Ichibanya Co 7630.T rallied 5.5% after the curry
restaurant chain operator said its operating profit for the
March-May period rose 40.7%. Japan Communications Inc 9424.T surged 6.7% after the
provider of mobile communications services said it will begin
sales of SIMs for citizen broadband radio services (CBRS) in the
United States. Of Tokyo's 33 sub-indexes, 24 were in negative territory.
Declining shares outnumbered gainers 1,209 to 821.
The broader Topix .TOPX edged down 0.27% to 1,543.49.

(Editing by Shri Navaratnam)