TOKYO, May 23 (Reuters) - Japan’s Nikkei share average suffered its biggest fall in two months on Wednesday, as comments from U.S. President Donald Trump rekindled worries about trade friction, hurting steelmakers and shippers among others.
The Nikkei tumbled 1.2 percent to 22,690, after sliding to 22,650 earlier, the weakest intraday level since May 11.
Trump on Tuesday said he was not pleased with recent trade talks between the United States and China, checking hopes that the world’s two biggest economies were on course to hammer out a deal. U.S. Treasury Secretary Steven Mnuchin has earlier said that trade war is “on hold”, sending the Nikkei over the psychologically important 23,000 level on Monday.
Trump’s latest remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts.
“I don’t think we need to worry too much about trade war hitting the market harder than now because China is seen compromising as it tries to defuse trade tensions with the U.S.,” said Isao Kubo, equity strategist at Nissay Asset Management.
“That said, although investors do not expect that tension will deteriorate dramatically from the current state, there is still lingering uncertainty and that’s keeping activity in check.”
Shippers were under pressure, with Mitsui OSK Lines and Kawasaki Kisen dropping 2.8 percent and 2.9 percent, respectively.
Steelmakers fell 1.4 percent, with JFE Holdings shedding 3.5 percent.
The broader Topix skidded 0.7 percent to 1,797, with small shares outperforming large cap shares.
Topix Small eased 0.1 percent, compared to a 0.9 percent fall in Topix Core 30. So far this week, the Topix Small is down 0.2 percent whereas the top 30 firms are down 1.4 percent.
The Nikkei volatility index jumped to three-week high of 16.41. (Editing by Shri Navaratnam)