TOKYO, July 27 (Reuters) - Japanese shares dropped on Monday due to worries about worsening ties between China and the United States, with exporters taking a hit due to a firmer yen.
At the midday break, the benchmark Nikkei 225 index was down 0.54% at 22,629.30. Markets in Japan were closed on July 23 and July 24.
All but five of 33 sector sub-indexes on the Tokyo exchange traded lower, with shippers, steel makers and airlines leading the declines.
Investor sentiment was hit on further deterioration in Sino-U.S. relations, following the tit-for-tat consulate closures in both countries.
Meanwhile, U.S. Secretary of State Mike Pompeo said on Thursday Washington and its allies must use “more creative and assertive ways” to press the Chinese Communist Party to change its ways.
The tense backdrop underpinned the safe-haven yen, with the currency rising to a four-month high of 105.68 yen to the dollar over the long weekend.
Exporters Mitsubishi Motors shed 3.24%, Toshiba Corp declined 2.45% and Fanuc Corp dropped 1.71%.
Among other individual shares, defence-related names gained due to tensions between the two largest economies.
Mine manufacturer Ishikawa Seisakusho Ltd rallied 7.19%, while flare manufacturer Hosoya Pyro-Engineering Co Ltd added 7.19%.
Semiconductor-related companies were bruised by a decline in Intel Corp shares following a report about a delay in its production of a 7-nanometer chip.
Screen Holdings Co Ltd slipped 3.25%, while Alps Alpine Co Ltd and Disco Corp lost 3.05% and 2.84%, respectively.
The broader Topix was down 0.5% at 1,565.02. (Reporting by Eimi Yamamitsu; editing by Uttaresh.V)