Nikkei hits five-week low, SoftBank weighs

Published: December 06, 2018 13:04:46 | Updated: December 22, 2018 11:37:38

File Photo (Collected)

Japan’s Nikkei closed at more than a five-week low on Thursday as chip-related stocks were hit after Canada arrested a top executive of Chinese tech giant Huawei.

Losses intensified later in the session as index heavyweight SoftBank Group Corp tumbled, hit by the news about Huawei and a partial disruption to its mobile phone service.

The Nikkei share average lost 1.9 per cent to end at 21,501.62, its lowest closing level since Oct. 30.

Canada’s Department of Justice said on Wednesday Huawei’s global chief financial officer Meng Wanzhou is now facing extradition to the United States. The arrest is related to violations of US sanctions, a person familiar with the matter said.

Meng’s arrest could inflame tensions between China and the United States just days after presidents Donald Trump and Xi Jinping agreed to steps to resolve their trade war at a meeting in Argentina.

The probe of Huawei is similar to one that threatened the survival of China’s ZTE Corp, which pleaded guilty in 2017 to violating US laws that restrict the sale of American-made technology to Iran.

Analysts said that while the US and China intensify their confrontation, Japan may be caught in the middle.

The chip sector was vulnerable, with Sumco Corp tumbling 6.6 per cent, Shin-Etsu Chemical dropping 3.4 per cent, Tokyo Electron shedding 4.5 per cent and Advantest Corp declining 5.3 per cent.

SoftBank, which is listing its mobile unit on Dec. 19, skidded 4.9 per cent.

Mobile phone parts makers were battered, with TDK Corp plunging 6.6 per cent and Anritsu Corp tanking 7.4 per cent.

According to gadget ranking site Kakaku.com, the five most popular phones in Japan are made by Huawei.

Ishikawa Seisakusho gained 0.9 per cent and Hosoya Pyro-Engineering jumped 6.7 per cent.

The broader Topix dropped 1.8 per cent to 1,610.60.

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