TOKYO (dpa-AFX) - The Japanese stock market is falling on Monday and the safe-haven yen strengthened following the sharp losses on Wall Street Friday as worries about an escalation in the U.S.-China trade war more than offset a positive reaction to Federal Reserve Chairman Jerome Powell's highly anticipated speech at the Jackson Hole Economic Policy Symposium.
On Friday, the Chinese government announced retaliatory tariffs on $75 billion of U.S. goods and U.S. President Donald Trump responded by saying his country will hike tariffs on $250 billion worth of Chinese goods to 30 percent from 25 percent.
The benchmark Nikkei 225 Index is losing 461.41 points or 2.23 percent to 20,249.50, after touching a low of 20,173.76 in early trades. Japanese shares closed higher on Friday.
The major exporters are sharply lower on a stronger safe-haven yen. Panasonic and Canon are losing more than 2 percent each, while Sony and Mitsubishi Electric are declining almost 2 percent each.
In the auto sector, Honda Motor is declining 2 percent and Toyota Motor is lower by almost 2 percent. In the tech space, Advantest is declining almost 1 percent and Tokyo Electron is lower by 3 percent.
Market heavyweight SoftBank and Fast Retailing are falling more than 3 percent each.
Among the Japanese stocks with China exposure, Fanuc is falling 4 percent, Hitachi Construction Machinery is lower by almost 3 percent and Komatsu is declining 2 percent.
Oil stocks are also weak after crude oil prices dropped on Friday. Inpex is losing more than 2 percent and Japan Petroleum is down almost 2 percent.
Among the worst performers, Yaskawa Electric is losing more than 6 percent, Kawasaki Kisen Kaisha is falling almost 5 percent and Tokuyama Corp. is lower by more than 4 percent.
In the currency market, the U.S. dollar is trading in the lower 105 yen-range on Monday.
On Wall Street, stocks closed sharply lower on Friday amid renewed U.S.-China trade concerns after a series of threatening tweets from President Donald Trump. Trump claimed the U.S. does not need China and subsequently ordered American companies to 'immediately start looking for an alternative to China.' The tweets from Trump came after the Chinese Finance Ministry announced plans to impose new tariffs on $75 billion worth of U.S. imports.
The Dow tumbled 623.34 points or 2.4 percent to 25,628.90, the Nasdaq plummeted 239.62 points or 3 percent to 7,751.77 and the S&P 500 plunged 75.84 points or 2.6 percent to 2,847.11.
The major European markets saw substantial volatility before closing sharply lower on Friday. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index and the German DAX Index slumped by 1.1 percent and 1.2 percent, respectively.
Crude oil prices declined sharply on Friday as trade tensions between the U.S. and China escalated, raising concerns over outlook for energy demand. WTI crude oil for October delivery tumbled $1.18 or about 2.1 percent to $54.17 a barrel.
Copyright RTT News/dpa-AFX