Tokyo shares fall 2.38% by break as China data disappoint

Tokyo stocks slid 2.38 percent in the morning session Tuesday, tracking Shanghai equities lower after another batch of weak Chinese manufacturing data supplied more evidence of a slowdown in Asia's top economy.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange dropped 450.20 points to 18,440.28. The Topix index of all first section shares fell 2.45 percent, or 37.73 points, to 1,499.32.

Confidence has waned in China's ability to support its markets in the face of a slump in the country's economic growth and a sell-off in world stock markets, analysts said.

"Investors are concerned about the strength of the global economy," Ayako Sera, a Tokyo-based strategist at Sumitomo Mitsui Trust Bank, told Bloomberg News.

The latest blow came from China's statistics bureau, which said its Purchasing Managers' Index (PMI) of manufacturing activity came in at 49.7 last month, its lowest since August 2012.

While the figure is better than last week's preliminary private reading from Chinese media group Caixin -- which hit a six-and-a-half-year low -- it is still below the 50-point mark that indicates contraction.

The indexes are seen as key barometers of the Asian giant's economic health, a key driver of global growth.

Analysts have voiced concern that markets are still not free of the turbulence that sparked huge sell-offs and sharp recoveries across the world last week.

Increased uncertainty has sent investors into safer assets such as the yen. In forex trade Tuesday the dollar was at 120.79 yen, down from 121.24 yen.

On Wall Street the Dow fell 0.69 percent, while the S&P 500 lost 0.84 percent and the Nasdaq dropped 1.07 percent.

"We know the Chinese economy is weakening, but we want to see how the deceleration impacts its major trading partners," Toshihiko Matsuno, chief strategist at SMBC Friend Securities told Bloomberg News.

"Japanese shares jumped for three days last week, so it's possible those who bought over the last week want to take profits," he added.

In Tokyo, Toshiba fell 3.13 percent to 372 yen after the engineering conglomerate, dented by a profit-padding scandal, delayed its revised earnings release owing to what it said were fresh accounting irregularities.

"This is truly regrettable," Japanese Finance Minister Taro Aso said in response to Toshiba's announcement late Thursday.

"We continue to hope that (Toshiba) promptly releases accurate information."

A stronger yen hit exporter shares with Sony dropping 1.82 percent to 3,104.5 yen, Toyota falling 1.42 percent to 7,090 yen, while telecom giant SoftBank was down 2.45 percent to 6,890 yen.

hih/pb/dan