September 3, 2018 / 6:37 AM / 16 days ago

Nikkei hit by trade tensions; Renesas Electronics tumbles

* Renesas’ plan for a big acquisition spurs financing concerns

* Tech shares fall, retail and food stocks rise

By Ayai Tomisawa

TOKYO, Sept 3 (Reuters) - Japan’s Nikkei fell on Monday as renewed trade worries hurt sentiment, while Renesas Electronics tumbled on concerns about how it would finance its plan to purchase a U.S. chipmaker.

The Nikkei share average shed 0.7 percent to 22,707.38.

U.S. President Donald Trump said on Saturday there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade negotiations or he would terminate the trilateral trade pact altogether.

Hiroyuki Fukunaga, chief executive of Investrust, said given the U.S.-Japan trade talks this month, “this news suggests a discouraging outlook for us,” adding that many investors are staying on the sidelines for now.

He said there are concerns that Trump will ask Japan to take specific steps to lower its trade deficit with the United States.

Tech shares were sold, with Tokyo Electron falling 1.9 percent, Kyocera Corp shedding 2.3 percent and Shin-Etsu Chemical sliding 2.5 percent.

Renesas Electronics Corp dived 6.4 percent after saying it is considering buying U.S. chipmaker Integrated Device Technology Inc as it beefs up its business in chips for self-driving cars and seeks new growth areas.

The Nikkei business daily said the deal could be worth as much as $6 billion. Traders said that the market is worried about how Renesas is going to finance such a large acquisition.

Retail and food stocks advanced, with Seven & i Holdings rising 0.8 percent and Kikkoman Corp <2801.T. up 1.4 percent.

The broader Topix dropped 0.9 percent to 1,720.31. (Editing by Shri Navaratnam)

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