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Japanese Market Declines

The Japanese stock market, which resumed trading after a holiday on Monday, is declining on Tuesday, while the safe-haven yen strengthened following the negative cues from Wall Street amid worries about the U.S.-China trade war and the political unrest in Hong Kong.

Investors also digested news that South Korea has decided to remove Japan from its "whitelist" of most trusted trading partners, in an apparent tit-for-tat move.

The benchmark Nikkei 225 Index is losing 261.07 points or 1.26 percent to 20,423.75, after touching a low of 20,369.27 in early trades.

The major exporters are lower as the safe-haven yen strengthened. Canon is declining almost 3 percent and Panasonic is losing more than 2 percent. Sony and Mitsubishi Electric are declining more than 1 percent each.

In the tech space, Advantest is rising almost 2 percent, while Tokyo Electron is lower by more than 1 percent.

Market heavyweight SoftBank is down more than 2 percent and Fast Retailing is lower by more than 1 percent. In the auto sector, Honda Motor is losing more than 2 percent and Toyota Motor is declining more than 1 percent.

Among oil stocks, Inpex is down almost 3 percent, while Japan Petroleum is adding 0.7 percent after crude oil prices rose overnight.

Among the other major gainers, Dentsu and Toray Industries are rising almost 3 percent each.

On the flip side, Toho Zinc is falling more than 18 percent and Kawasaki Kisen Kaisha is losing more than 6 percent. Ebara Corp. and T&D Holdings are lower by almost 6 percent each.

On the economic front, the Bank of Japan said that producer prices in Japan were flat on month in July, following the 0.5 percent drop in June. Export prices were down 0.3 percent on month and 4.7 percent on year, the bank said, while import prices sank 1.8 percent on month and 8.1 percent on year.

Japan will also release June results for its tertiary industry index today.

In the currency market, the U.S. dollar is trading in the lower 105 yen-range on Tuesday.

On Wall Street, stocks closed sharply lower on Monday amid worries about a prolonged trade war between the U.S. and China after President Donald Trump recently indicated he feels no sense of urgency to resolve the dispute. Concerns about the impact of increasingly violent protests in Hong Kong also weighed on stocks, with the Hong Kong International Airport canceling all departing flights due to the disruption caused by protesters.

The Dow plunged 391.00 points or 1.5 percent to 25,896.44, the Nasdaq tumbled 95.73 points or 1.2 percent to 7,863.41 and the S&P 500 slumped 35.96 points or 1.2 percent to 2,882.69.

The major European markets all moved modestly lower on Monday. While the German DAX Index slipped by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.3 percent and 0.4 percent, respectively.

Crude oil prices edged higher on Monday amid speculation production cuts by OPEC and lower shipments from Saudi Arabia will outweigh concerns about near term energy demand outlook. WTI crude for September ended up $0.43 or about 0.8 percent at $54.93 a barrel.

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