May 9, 2019 / 3:14 AM / 3 months ago

Nikkei hits 6-week low with eye on U.S.-China talks; SoftBank, Yahoo Japan soar

* Nikkei has dropped 4.3 pct over past four sessions

* Topix falls to lowest since mid-February

* Communication sector helped by SoftBank Corp, Yahoo Japan

By Ayai Tomisawa

TOKYO, May 9 (Reuters) - Japan’s Nikkei fell for a fourth day to a six-week low as investors remained cautious ahead of the next round of U.S-China trade talks, while SoftBank Corp and Yahoo Japan were under the spotlight after their alignment news.

The Nikkei share average was down 1.2 percent to 21,334.13 at the midday break, after falling as low as 21,315.07, its lowest since March 29.

The Nikkei has shed 4.3 percent over the past four sessions.

U.S. President Donald Trump has threatened to impose additional tariffs on Chinese goods beginning on Friday, while Beijing said it would retaliate if tariffs rise.

Chinese Vice Premier Liu He was due to arrive in Washington for two days of trade talks.

“The direction of the Japanese market relies on the outcome of the trade talks on Friday. If the two countries delay the conclusion while keeping the market with a bit of hope, we may not see much turbulence,” said Isao Kubo, an equity strategist at Nissay Asset Management.

The broader Topix dropped 1.5 percent to 1,548.92, after falling to 1,548.38, the lowest since mid-February.

All but the communication sector were in negative territory.

Cyclical stocks were particularly sold, with shippers and machinery manufacturers with high exposure to China underperforming.

Kawasaki Kisen tumbled 5.8 percent, Mitsui OSK Lines plunged 3.5 percent, Komatsu Ltd shed 3.6 percent. Fanuc Corp slipped 3.2 percent and Yaskawa Electric dropped 2.6 percent.

The communication sector was helped by SoftBank Corp , which jumped 7 percent after saying that it would spend $4 billion to up its stake in Yahoo Japan Corp, which also soared 8.4 percent.

The telco said it would buy 456.5 billion yen ($4.2 billion) worth of new shares to be issued by Yahoo Japan, increasing SoftBank Corp’s stake to 45 percent from 12 percent.

SoftBank Corp also said that it plans to pay a dividend of 85 yen per share for the fiscal year ending March 2020, up from 37.50 yen per share a year ago.

Elsewhere, Takeda Pharmaceutical rose more than 3 percent at one point after Swiss drugmaker Novartis <AG NOVN.S> said on Wednesday it agreed to acquire Takeda’s dry eye drug Xiidra for $3.4 billion. (Editing by Darren Schuettler)

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