Nikkei Drops And Political Uncertainty Discourages Risk

The Nikkei benchmark closed lower on Tuesday, August 18th, pulling away from the six-month peak it touched last week, as global political uncertainty led to risk aversion among investors.

Nikkei lost 0.2% to 23,051.08 points, away from Friday’s 23,338 peak, the highest level since late February. The broader TOPIX index closed down 0.06% at 1,610.85 points.

The rise in the yen led to profit-taking in a market capped by already elevated values, escalating tensions between the United States and China and doubts about US fiscal stimulus.

Shares of airlines fell 1.7% after they reported a weakness in passenger traffic during the “Obon” holiday earlier this month due to the growing domestic cases of Covid-19 disease.

The banking sector fell 1% with the decline in US bond yields, while export companies were affected by the rise in the yen against the dollar, including car manufacturers, whose shares rose earlier this month.