August 31, 2018 / 7:10 AM / 8 months ago

Nikkei ends flat, snaps 8-day rally on U.S.-China trade war fears

* Nikkei gains 1.2 pct for week, 1.4 pct for month

* Friday session snaps 8-day rally on trade war fears

* Falling emerging market currencies dent mood

By Ayai Tomisawa

TOKYO, Aug 31 (Reuters) - Japan’s Nikkei ended flat on Friday, snapping an eight-day rally after U.S. President Donald Trump said he is ready to quickly ratchet up a trade war with China, rattling Asian markets.

The Nikkei share average ended 0.02 percent, or 4.35 points, lower at 22,865.15 points, after rising eight consecutive sessions.

The benchmark index hit the psychologically important mark of 23,000 this week, but failed to stay above that level at the market close.

The Nikkei gained 1.2 percent for the week and 1.4 percent for the month.

Bloomberg News reported that Trump is prepared to quickly ramp up a trade war with China and has told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week.

Markets had expected the tariff move in late September, which in theory provided room for further negotiations between Washington and Beijing.

“Investors do not want to take positions now as there is news related to trade friction, one after another. There is a possibility that markets will be rocked again,” said Fujio Ando, senior managing director at Chibagin Securities.

He said losses were limited by expectations that the Bank of Japan may buy exchange-traded funds to support the market, as it has often done in the past.

Analysts also said that weaker emerging market currencies had dampened the risk sentiment among investors.

Commodity stocks lost ground, with shares in steel, non-ferrous metal and shipping companies underperforming.

Nippon Steel & Sumitomo Metal Corp tumbled 1.9 percent, JFE Holdings shed 1.3 percent, Sumitomo Metal Mining dropped 1.7 percent and Kawasaki Kisen declined 1.4 percent.

On the positive side, Electronics device maker Fujitsu Ltd rose 1.7 percent after the company said it would buy back up to 22 million of its own shares, or 1.08 percent of its outstanding shares, worth up to 18 billion yen.

The broader Topix dropped 0.2 percent to 1,735.35 points. (Reporting by Ayai Tomisawa Editing by Darren Schuettler)

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