Tokyo shares open lower

·2-min read

Tokyo shares opened lower Wednesday as the global market tried to digest the crisis at Chinese property giant Evergrande.

The benchmark Nikkei 225 index dropped 0.31 percent or 93.92 points to 29,745.79 in early trade, while the broader Topix index fell 0.35 percent or 7.27 points to 2,057.28.

The dollar stood at 109.15 yen, slipping from 109.21 yen in New York Tuesday.

Lingering worries over the Evergrande crisis continued to weigh on the market, with US shares ending down even after some Asian and European markets managed to gain overnight.

Overnight the Dow lost 0.2 percent and the S&P 500 fell 0.1 percent. But the Nasdaq firmed 0.2 percent.

It came despite Frankfurt rising 1.2 percent and Paris adding 1.3 percent.

"US shares overnight ended in a way that left a bad taste in the mouth," Okasan Online Securities said in a note.

The Tokyo market will see "directionless trade," it said, adding that the market will take "one step forward, one step back."

"We don't expect the risk-off sentiment stemming from China will push down Japanese shares very deeply, but it is also true that it has poured cold water on recent optimism," Okasan said.

Investors are watching policy meeting decisions by the Bank of Japan and US Federal Reserve.

"Market sentiment... remains fragile ahead of the FOMC today" and with focus on Evergrande, Tapas Strickland, director of economics at National Australia Bank, wrote in a note.

The worst fears over Evergrande seem to have calmed "as analysts put their faith in China's authorities to undertake an orderly restructuring," he added.

The market is now focused on any "hawkish surprise" from the Fed and Chair Jerome Powell's statement, he added.

The appreciation of the yen hit exporters. Toyota fell 1.07 percent to 9,823 yen. Sony Group slipped 0.73 percent to 12,250 yen.

Industrial robot maker Fanuc gave up 2.01 percent to 25,060. Construction equipment maker Komatsu, which counts China as its major market, fell 1.12 percent to 2,684 yen.

Mitsubishi UFJ Financial Group added 1.49 percent to 641.9 yen after it officially announced sales of its US unit Union Bank.

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