Japan stocks dive after 4-day break as growth concern mounts

TOKYO: Japanese stocks tanked on the first trading day of the New Year, as Apple Inc’s outlook cut and weak economic data from the US and China intensified global growth concerns.

The blue-chip Nikkei 225 Stock Average was down more than 3.5% in early trading in Tokyo.

The broader Topix gauge also fell sharply, with a group of electronics makers weighing the most.

Japan resumed trading on Friday after local markets were shut for four days for the New Year’s holiday.

The Topix tumbled 18% in 2018, its worst annual performance in seven years.

US equities sank Thursday as weak ISM manufacturing data stoked recession fears and after Apple cut its revenue forecast, citing struggling iPhone sales in China.

Factory numbers deteriorated in China as well, with the Caixin Media and IHS Markit PMI for December falling to 49.7, its lowest reading since May 2017.

“Belief in global corporate earnings is fading against the backdrop of the US-China trade friction,” said Nobuhiko Kuramochi, head of investment information at Mizuho Securities Co in Tokyo. “Deteriorating Apple earnings will lead to volume cuts for suppliers including those in Japan, while it could also mean cost-cutting pressures.”

Apple supplier Murata Manufacturing Co lost more than 10% and was among the biggest drags on the Topix Friday.

Japan Display Inc, TDK Corp. and Alps Alpine Co. each dropped at least 4%.

China-linked factory automation and consumer goods names including Yaskawa Electric Corp and Shiseido Co were among the biggest decliners on the Nikkei 225.