* Trump concerns pressure market mood
* Insurers, banks tumble
* Investors buy utility, food stocks
By Ayai Tomisawa
TOKYO, May 17 Japanese stocks dropped on
Wednesday morning after the dollar eased against the yen on weak
U.S. economic data, while financials stocks underperformed hit
by lower U.S. yields.
The Nikkei shares average fell 0.5 percent to
19,817.68 in mid-morning trade.
The dollar skidded 0.5 percent to one-week lows against its
perceived safe-haven Japanese counterpart and last stood at
U.S. housing starts dropped 2.6 percent to a seasonally
adjusted annual rate of 1.17 million units, the lowest since
The market's mood was further dampened by weakening
confidence over the U.S. president's ability to push through tax
reforms and stimulus programmes investors had been hopeful for
since his election in November.
President Donald Trump asked his now-dismissed FBI Director
James Comey to end the agency's investigation into ties between
former White House national security adviser Michael Flynn and
Russia, according to a source who had seen a memo written by
"We still can't say clearly that this Trump's case is a
serious risk to the stock market yet. But people are watching if
it leads to more serious problems such as a difficulty for him
to push through his tax reforms and fiscal policy," said Takuya
Takahashi, a strategist at Daiwa Securities.
Financial stocks such as insurers and banks
- that earn profits from investing in higher-yielding
products - tumbled after U.S. Treasury yields fell as low as
2.31 percent overnight.
Dai-ichi Life Holdings stumbled 4.0 percent, Sompo
Holdings dropped 1.8 percent, while Mizuho Financial
Group languished 2.4 percent.
Domestic-demand-sensitive stocks, such as utility and food
shares, gained as investors stayed defensive. Tokyo Gas
climbed 2.3 percent, and Ajinomoto and Japan Tobacco
both rose 1.3 percent.
The broader Topix shed 0.4 percent to 1,577.34 and
the JPX-Nikkei Index 400 declined 0.5 percent to
(Editing by Jacqueline Wong)