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Nikkei hits 3-1/2-wk lows on growth fears; banks down on lower Treasury yields

Published 10/04/2019, 11:35 AM
Updated 10/04/2019, 11:40 AM
Nikkei hits 3-1/2-wk lows on growth fears; banks down on lower Treasury yields
JP225
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TOPX
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IBNKS.T
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IINSU.T
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TOKYO, Oct 4 (Reuters) - Japanese shares edged down on
Friday, with financials leading the losses, after a soft U.S.
service sector survey fanned growth worries and boosted the
safe-haven yen.
The downbeat U.S. economic news adds to a set of weak data
earlier in the week, and has deepened fears that the U.S.-China
trade war is starting to hurt growth in the world's biggest
economy.
The benchmark Nikkei average .N225 shed as much as 0.3% to
hit its lowest level since Sept. 9 and ended the morning session
at 0.1% lower at 21,321.99.
The index was on track to post the biggest weekly loss in
two months, down 2.6% so far this week.
The survey from the U.S. Institute for Supply Management
(ISM) showed its non-manufacturing activity index falling to the
lowest level in more than three years in September, and far
below expectations. The data sent the Treasury yields lower across maturities
and the dollar to one-month lows of 106.48 against the yen in
U.S. trade.
In Tokyo, financial stocks came under pressure, with banking
.IBNKS.T and insurance .IINSU.T sectors among the worst
performers, down 1.2% and 0.9%, respectively.
Lower U.S. interest rates squeeze banks' lending margins and
interest income as Japanese banks and insurance companies have
stepped up investments in the United States in recent years.
The broader Topix .TOPX fell 0.3% to 1,564.62 by the
midday break, with all but four of its 33 subindexes trading in
negative territory.
Still, many investors remained on the sidelines ahead of a
key U.S. jobs report that could help determine whether the
Federal Reserve cuts interest rates further.
The data due later on Friday are forecast to show the U.S.
economy added 145,000 new jobs in September, more than an
increase of 130,000 in the previous month.

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