* Murata, TDK, Taiyo Yuden, Tokyo Electron, TDK underperform
* SoftBank jumps after T-Mobile deal for Sprint gets boost from FCC
By Ayai Tomisawa
TOKYO, May 21 (Reuters) - Japan’s Nikkei slipped on Tuesday as Washington’s blacklisting of Huawei took a heavy toll on suppliers to the Chinese telecoms equipment maker, but the downside was limited after the United States temporarily eased trade restrictions.
The Nikkei ended 0.1% lower at 21,272.45. It briefly turned positive after news the U.S. government had temporarily eased trade restrictions imposed last week on China’s Huawei Technologies Co Ltd.
Since the White House added Huawei to a trade blacklist last week, several global companies have suspended business with the world’s largest telecoms equipment maker.
“We are worried that the move by the U.S. would lead to a further deterioration of trade tensions between the United States and China. If the trade worries drag on, Japanese companies’ earnings in the second half will also likely be hit,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
The electric machinery sector tumbled 1%, underperforming the overall market. Murata Manufacturing shed 1.5%, TDK Corp declined 0.9%, while Tokyo Electron slumped 1.9%, Taiyo Yuden slid 0.6% and Hitachi High-Technologies dropped 1.7%.
Mizuho Securities estimates that sales to Huawei account for about 6-8% at these suppliers.
Other cyclical stocks also lost ground, with shippers Mitsui OSK Lines down sharply by 4% and Kawasaki Kisen also stumbling 4.1%.
SoftBank Group Corp, which has a stake in Sprint Corp, soared 3.5% after news that T-Mobile US Inc’s $26 billion acquisition of rival Sprint appeared to win the support of a majority of the Federal Communications Commission on Monday.
Domestic-demand sensitive stocks outperformed as investors stayed defensive. Realtor Mitsui Fudosan rose 1.7%, while drugmaker Daiichi Sankyo gained 1.2%.
The broader Topix dropped 0.3% to 1,550.30. Declining issues outnumbered advancing ones 1,320 to 743. (Editing by Jacqueline Wong)