Nikkei retreats as investors nervous before Trump-Xi meeting

TOKYO, June 28 (Reuters) – Tokyo stocks fell on Friday as investors turned cautious ahead of much awaited talks between US and Chinese leaders on the sidelines of the G20 summit in Japan, with cyclical shares retreating before the weekend.

The benchmark Nikkei average dropped 0.3 per cent to 21,275.92 points, having risen 1.2 per cent on Thursday after a South China Morning Post report raised hopes Washington and Beijing might make progress in talks.

For June, the Nikkei rose 3.3 per cent for the first monthly gain since April, though it was almost flat for the week.

US President Donald Trump said on Wednesday a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose US tariffs on most remaining Chinese imports if the two countries don't agree.

White House economic adviser Larry Kudlow told Fox News on Thursday that Trump's decision on whether to impose new tariffs on a $300 billion list of nearly all remaining Chinese imports will depend on the outcome of Saturday's meeting at the western Japanese city of Osaka.

Traders say investors unwound their positions in cyclical stocks ahead of the weekend and the Bank of Japan's closely watched "tankan" survey, due on Monday.

"Even if the two countries could reach a positive agreement, Japanese equities would benefit little. Expectations in the market are that the US will ease their monetary policy, which would make the dollar pressured against the yen," said Isao Kubo, an equity strategist at Nissay Asset Management.

"Whether the yen strengthens or not is also of invesRead More – Source

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