June 13, 2019 / 6:38 AM / 12 days ago

Nikkei slips as chip-related stocks weigh; Japan Display tanks

* JDI nosedives after it says to cut jobs, downsize mobile ops

* Tokyo Electron, Advantest tumble

* Banks weak on prospects for U.S. rate cut

* Eyes on geopolitical risk amid extradition protests in Hong Kong

By Ayai Tomisawa

TOKYO, June 13 (Reuters) - Japan’s Nikkei fell on Thursday, with chip-related shares battered after their U.S. counterparts tumbled while the U.S.-China trade dispute and geopolitical risks dampened sentiment.

The Nikkei share average dropped 0.5% to 21,032.00.

Chip-related stocks lost ground, with Tokyo Electron plummeting 4.2% and Advantest Corp sinking 5%, after the Philadelphia Semiconductor index dropped 2.3%, as Micron Technology Inc and Applied Materials Inc both slumped more than 5%.

“Japanese tech shares took a hit as global investors are likely unloading shares in the overall tech sector,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.

Concerns over trade continued to weigh on sentiment, after U.S. President Donald Trump on Tuesday said he was holding up a deal with China and had no interest in moving ahead unless Beijing agrees to four or five major points.

Trading volume was thin as investors awaited more cues for trade at the G20 summit this month, while they remained on the sidelines before the June settlement of Japanese stock futures and options on Friday.

Investors were keeping a close eye on violent protests in Hong Kong over an extradition bill that would allow people to be sent to mainland China for trial.

“A geopolitical risk has emerged amid Hong Kong extradition protests,” said Masayuki Doshida, a senior market analyst at Rakuten Securities.

“Investors might not have positioned themselves based on this yet, but depending on developments, it could be a reason to dent the market in the future.”

Hong Kong authorities were shutting government offices in the city’s financial district for the rest of the week after a day of violence over the bill.

Financial stocks, which benefit from higher rates, languished on growing views the Federal Reserve will cut interest rates. Mitsubishi UFJ Financial Group fell 1.3% and Sumitomo Mitsui Financial Group dropped 1%.

Japan Display Inc plunged 12% after the struggling smartphone screen maker said it would downsize its mobile business and cut 1,200 jobs.

The broader Topix fell 0.8% to 1,541.50, with all but one of its 33 subsectors in the red. (Editing by Jacqueline Wong)

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