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Tokyo stocks open lower on worries over US tax cut
TOKYO, Dec 15, 2017 (BSS/AFP) – Tokyo stocks opened lower Friday as fresh
doubts about US tax cut plans outweighed a robust business confidence survey
that showed firms at their most bullish for 11 years.
The benchmark Nikkei 225 index fell 0.25 percent, or 55.81 points, to
22,638.64 in early trade while the broader Topix index was down 0.37 percent,
or 6.64 points, at 1,801.50.
“While we don’t have much of a buying peg today, we see worrisome news
flowing in” about the tax reform, said Toshihiko Matsuno, chief strategist at
SMBC Friend Securities.
The Bank of Japan released a quarterly survey just before the opening
bell, showing confidence among the biggest manufacturers at an 11-year high.
But the good news was quickly dismissed by investors who had expected
strong figures, Matsuno told AFP.
Sentiment was dampened after reports that Senator Marco Rubio, a Florida
Republican, could vote against the final tax cut package — reviving worries
about the long-anticipated plan.
The Senate approved its version of the measure by just two votes including
Rubio’s, leaving President Donald Trump’s party little margin to lose
support.
Another Senator, John McCain, has been in hospital as he fights an
aggressive form of brain cancer.
Should McCain’s return be delayed, prospects for the tax overhaul would
narrow substantially.
“Dark clouds have suddenly appeared” over the tax plan, Matsuno said.
In Tokyo stocks trade, heavy selling continued to hit telecom carriers as
online commerce giant Rakuten said it wanted to set up its own mobile carrier
in Japan, spawning worries that competition will intensify.
Mobile operator SoftBank dropped 2.01 percent to 8,966 yen while Rakuten
itself plunged 6.27 percent to 1,016.5 yen.
Banks were broadly lower with Mitsubishi UFJ Financial losing 1.74 percent
to 795.5 yen.
Exporters also dropped as the yen held up against the dollar, darkening
their earnings outlooks.
Toyota sank 1.67 percent to 6,977 yen and Nintendo dropped 0.76 percent to
42,680 yen.
The dollar was trading at 112.32 yen early Friday against 112.37 yen in
New York Thursday afternoon.
BSS/AFP/HR/1005