TOKYO, Oct 9 (Reuters) - Japanese shares fell on Wednesday as escalating U.S.-China tensions dimmed hopes for a deal in high-level trade talks this week and soured the mood of investors.
The Nikkei share average fell 0.61% to 21,456.38 while the broader Topix lost 0.30% to 1,581.70, though both had pared earlier losses and advancing shares outpaced declining stocks.
Washington on Tuesday imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, a move Beijing denounced as interference in its internal affairs.
The U.S. decision cast a pall over high-level trade talks set for Thursday and Friday in the U.S. capital.
Growth-sensitive technology shares led Tokyo’s decline, with robot maker Fanuc down 1.6% and Keyence off 1.2%.
Chip-related shares were hit the hardest, with Sumco , a maker of silicon wafers, down 3.4% and Advantest falling 2.4%.
“There is profit-taking in chip related stocks after big gains yesterday as the sector is susceptible to the U.S.-China relations,” said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
“The big fall in Phiadelphia semiconductor stock index also hurt the sentiment,” he added.
AGC dropped 2.9% after the glass maker said it expected a 36% drop in annual net profit due to an impairment in its auto glass business.
Nissan Motor fell 1.1%, a bit more than the overall market, after automaker said its new CEO is an executive known for close ties to top shareholder Renault.
Defensive stocks attracted buyers. Kao, a manufacturer of toiletries, rose 1.6%, while retailer Seven&I Holdings gained 0.7%.
Kansai Electric Power rose 2.5% after media reported its chairman has decided to resign amid a graft scandal that has rocked public trust in Japan’s second-largest utility. (Reporting by Hideyuki Sano; editing by Darren Schuettler)