June 29, 2020 / 3:44 AM / 8 days ago

Japanese stocks track Wall Street losses on renewed virus fears

SYDNEY, June 29 (Reuters) - Japanese shares fell on Monday, tracking Wall Street’s sharp retreat on Friday after several U.S. states imposed business restrictions to tackle a resurgence in new coronavirus cases.

Cyclical stocks led declines on Japan’s Nikkei average , which dropped 1.3% to 22,214.69 by the midday break after hitting its lowest level since June 16 earlier in the session.

The Nikkei also fell below a major support level of its 25-day moving average, which was last at 22,365, for the first time since April 7.

Wall Street’s major indexes tumbled on Friday as some U.S. states reconsidered their reopening plans after the early lifting of restrictions was followed by a resurgence in new infections.

Further denting investor sentiment, the Wall Street Journal reported that the Phase 1 U.S.-China trade deal could be at risk.

Tokyo-listed banks tracked U.S. counterparts lower, with Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Financial Group (SMFG) falling 1.9% and 1.5%, respectively.

Shares of the Nikkei’s heavyweight SoftBank Group dropped 1.3%.

The company said it expects a gain of around 600 billion yen ($5.6 billion) in the April-June quarter on the sale of T-Mobile shares, but a derivative liability from call options received by T-Mobile’s top shareholder, Deutsche Telekom, is not included in that figure.

The broader Topix lost 1.2% to 1,558.44 by the recess, with all of the 33 sector sub-indexes on the Tokyo exchange trading lower.

Highly cyclical iron and steel, mining and insurance were the three worst-performing sectors on the main bourse. ($1 = 107.1800 yen) (Reporting by Tomo Uetake; Editing by Devika Syamnath)

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