TOKYO (Kyodo) -- Tokyo stocks fell sharply Thursday, with the benchmark Nikkei hitting a one-month low, as concern grew that Japanese corporate earnings would be severely hurt by the ongoing U.S.-China trade conflict.
The 225-issue Nikkei Stock Average ended down 422.94 points, or 1.97 percent, from Wednesday at 21,046.24, its lowest close since June 18. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 33.14 points, or 2.11 percent, lower at 1,534.27.
Every industry category lost ground, led by oil and coal product, mining and marine transportation issues.
Shares lost ground throughout the day, with the Nikkei dropping for the third straight day, as investors locked in gains while bracing themselves before the April-June earnings season gets into full swing next week, brokers said.
Worries about the U.S.-China tariff battle were rekindled after The Wall Street Journal reported negotiations between the two have stalled on disagreements over lifting the U.S. trade ban on China's Huawei Technologies Co.
The trade row between the world's two largest economies has been affecting Japanese firms. The Finance Ministry said in the morning that Japan logged a goods trade deficit for the first half of the year due to slower exports to China and other Asian economies.
"Investors sold shares to secure profits as they are becoming aware of risks concerning downgrading of full-year earnings," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co.
Yutaka Miura, senior technical analyst at Mizuho Securities Co. said, "Investors who had been in a wait-and-see mood ahead of the earnings season turned cautious."
Sentiment was also dented by trade risks between Japan and South Korea amid growing tensions over Japan's export controls on key materials to South Korea's chipmakers, brokers said.
On the First Section, declining issues outnumbered advancers 2,075 to 55, while 20 ended unchanged.
Marine transporters were also among major casualties of the U.S.-China trade war. Kawasaki Kisen lost 55 yen, or 4.0 percent, to 1,316 yen while Mitsui O.S.K. Lines shed 69 yen, or 2.6 percent, to 2,563 yen.
Canon slid 127 yen, or 4.0 percent, to 3,036 yen after the Nikkei business daily reported the camera and office equipment maker expects a 40 percent slide in its group operating profit for 2019 amid a slowdown the European economy.
Trading volume on the main section rose to 1,288.72 million shares from Wednesday's 1,023.95 million shares.