May 24, 2018 / 2:43 AM / 5 months ago

Nikkei drops to over 2-week lows as U.S probe hits automakers

TOKYO, May 24 (Reuters) - Japan’s Nikkei share average fell to more than two-week lows on Thursday as automakers like Toyota slumped after the Trump administration launched a national security investigation into car and truck imports that could lead to new U.S. tariffs.

The Nikkei dropped 1.2 percent to 22,425.19 points by midmorning, after falling to 22,389.94, the lowest level since May 9.

The transportation equipment sector stumbled 2.6 percent and was the worst performer on the board after news of the U.S. probe.

Toyota Motor Corp fell 2.7 percent, Subaru Corp dropped 2.9 percent and Mazda Motor Corp dived 4.3 percent.

Nissan Motor Co and Honda Motor Co shed 1.8 percent and 2.8 percent, respectively.

“Sentiment in the auto sector is bad with the tariff concerns, and a strong yen is pouring salt on the wound,” said Takashi Ito, equity market strategist at Nomura Securities.

The dollar shed 0.3 percent to 109.73 yen in early Asian trade, a day after it had fallen 0.73 percent, its biggest fall in nearly three months.

GS Yuasa, which makes automotive lithium-ion batteries with Honda, stumbled 3.3 percent after the Nikkei business daily reported that the automaker will team up with Contemporary Amperex Technology, the world’s largest battery maker, to develop electric vehicle batteries that it seeks as key to its global strategy.

Elsewhere, discount clothing chain Shimamura dived 5.6 percent after its May same-store sales dropped 7.7 percent on the year due to cold weather.

The broader Topix dropped 1.1 percent to 1,778.20. (Editing by Kim Coghill)

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