May 8, 2019 / 2:53 AM / a year ago

Nikkei tumbles to 5-week low on fears of deeper U.S.-China trade tensions

* Nikkei falls to lowest since April 3

* Topix’s 33 subsectors all in the red

* Japan Airlines falls after reports of system glitch

By Ayai Tomisawa

TOKYO, May 8 (Reuters) - Japan’s Nikkei tumbled to a five-week low on Wednesday morning as fears there might be a breakdown in U.S.-China trade negotiations continued to pull down cyclical stocks.

Investors were spooked by a sell-off in Wall Street overnight where its Dow Jones Industrial Average had its second-biggest daily percentage drop of the year.

The Nikkei share average tumbled 1.7 percent to 21,546.57, the lowest since April 3, before ending the morning session down 1.6 percent at 21,584.26.

This followed a 1.5 percent drop on Tuesday, when investors returned to the market after a 10-day break that included Japan’s Golden Week holidays.

“The market before the Golden Week was optimistic. Investors had expected that the U.S.-China trade talks would be resolved soon but things are looking serious,” said Hiroyuki Ueno, a senior strategist at Sumitomo Mitsui Trust Asset Management.

“If it’s just Trump who is saying this, we can expect that his stance may turn around the next day. But since it now looks like his whole administration is echoing his stance, the situations look more complicated.”

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin said late on Monday China had backtracked from commitments made during earlier negotiations.

The comments followed President Donald Trump’s statement on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.

China-related stocks kept sliding. Construction equipment makers Komatsu Ltd plunged 3.9 percent, and Hitachi Construction Machinery dropped 2.5 percent.

Tech shares were sold, with TDK Corp falling 2.7 percent and Hitachi Ltd sliding 2.9 percent.

Yamaha Motor tumbled 11 percent after its January-March operating profit dropped 12.8 percent from a year earlier.

Japan Airlines stumbled 3.7 percent after local media reported that a glitch in its automated check-in system delayed flights at domestic airports for about two hours in the early morning.

The media reports said the issue was resolved before 0100 GMT.

The broader Topix dropped 1.7 percent to 1,573.28, with all 33 subsectors were in the red.

Declining issues outnumbered advancing ones 1,798 to 286. (Editing by Richard Borsuk)

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