Tokyo stocks open lower on worries over US tax cut

Tokyo stocks opened lower Friday as fresh doubts about US tax cut plans outweighed a robust business confidence survey that showed firms at their most bullish for 11 years.

The benchmark Nikkei 225 index fell 0.25 percent, or 55.81 points, to 22,638.64 in early trade while the broader Topix index was down 0.37 percent, or 6.64 points, at 1,801.50.

"While we don't have much of a buying peg today, we see worrisome news flowing in" about the tax reform, said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.

The Bank of Japan released a quarterly survey just before the opening bell, showing confidence among the biggest manufacturers at an 11-year high.

But the good news was quickly dismissed by investors who had expected strong figures, Matsuno told AFP.

Sentiment was dampened after reports that Senator Marco Rubio, a Florida Republican, could vote against the final tax cut package -- reviving worries about the long-anticipated plan.

The Senate approved its version of the measure by just two votes including Rubio's, leaving President Donald Trump's party little margin to lose support.

Another Senator, John McCain, has been in hospital as he fights an aggressive form of brain cancer.

Should McCain's return be delayed, prospects for the tax overhaul would narrow substantially.

"Dark clouds have suddenly appeared" over the tax plan, Matsuno said.

In Tokyo stocks trade, heavy selling continued to hit telecom carriers as online commerce giant Rakuten said it wanted to set up its own mobile carrier in Japan, spawning worries that competition will intensify.

Mobile operator SoftBank dropped 2.01 percent to 8,966 yen while Rakuten itself plunged 6.27 percent to 1,016.5 yen.

Banks were broadly lower with Mitsubishi UFJ Financial losing 1.74 percent to 795.5 yen.

Exporters also dropped as the yen held up against the dollar, darkening their earnings outlooks.

Toyota sank 1.67 percent to 6,977 yen and Nintendo dropped 0.76 percent to 42,680 yen.

The dollar was trading at 112.32 yen early Friday against 112.37 yen in New York Thursday afternoon.