Nikkei extends losses after Abe says US-Japan trade pact still not finalised

TOKYO (Reuters) - Tokyo stocks slipped to one-week lows on Thursday, extending losses into the afternoon session as Japanese Prime Minister Shinzo Abe said that a trade pact with the United States hasn't been finalised yet.

Abe's comments came after a meeting with United States President Barack Obama who is on a state visit to Japan.

Some investors had been hoping that a two-way trade deal, seen as crucial to a broader trans-Pacific agreement, could be reached at the meeting.

The Nikkei share average fell 1.2 per cent to 14,367.13 at one point, its lowest level since Thursday last week.

A US-Japan trade deal could benefit Japan's major exporters such as car makers in the medium-term. Abe has touted the broader trade deal as vital for growth in the world's third-biggest economy, but faces tough domestic opposition to opening up agricultural market.

Mollifying Japan's powerful farmers' lobby and completing a successful trade pact is seen as a key test on whether Abe can deliver the third arrow, or structural reform, to go with two others that's already been deployed - fiscal and monetary stimulus measures.

The Nikkei was also under pressure ahead of the looming earnings season and lingering worries over the economic impact of a sales tax hike that kicked in this month.

The broader Topix index fell 0.9 per cent.

Register here to get free digital access to The Straits Times until Aug 9, 2015.
Comments