TOKYO: Japan's Nikkei stooped to a three-month low on Tuesday, as investor sentiment took a further hit after China defied Washington by announcing retaliatory tariffs, dragging most sectors into negative territory.China said it would impose higher tariffs on $60 billion in United States goods despite President Donald Trump's warnings not to retaliate against additional tariffs on Chinese imports announced by the White House on Friday.The Nikkei share average ended the day down 0.59 per cent at 21,067.23 after falling to as low as 20,751.45, the lowest since mid-February."Investors are concerned how much damage the trade war will cause on Japan's real economy and financial market," said Shusuke Yamada, vice president and chief Japan FX strategist at Bank of America Merrill Lynch.Automakers came under pressure.
Mazda Motor slid 2 per cent and Subaru Corp fell 2.3 per cent.Nissan Motor Co fell 2.95 per cent after the Nikkei business daily reported that the automaker will likely experience its fourth straight year of decreasing profits in the financial year through March 2020.But traders added that with signs of the market being oversold, some short-term investors were covering earlier shorts.Komatsu Ltd, with a large exposure to China, ended up 0.55 per cent after slumping 4 per cent earlier.
Fanuc Corp was up 0.1 per cent after dropping 2.9 per cent and Yaskawa Electric rose nearly 1 per cent after sliding 4.5 per cent.Large telecommunication companies, considered defensive shares, gained amid the drop in the broader market.
Nippon Telegraph and Telephone Corp rose 1.9 per cent and KDDI Corp climbed 2.4 per cent.The broader Topix shed 0.4 per cent to 1,534.98, after falling to a more than four-month low of 1,508.85.Small cap markets also lost ground, with the Mothers index sliding 1.96 per cent and the Jasdaq market shedding 0.59 per cent.