Jun 30, 2018 (Nikkei) - Trading volume on the Tokyo Stock Exchange has slumped to the lowest level in 14 years, while Shanghai shares have fallen six weeks in a row, underscoring investor concern over U.S.-China tariff tensions.
Daily trading on the Tokyo bourse's first section averaged 1.5 billion shares in the January-June period, down 20% on the year and the lowest first-half figure since 2004.
The benchmark Nikkei Stock Average closed at 22,304.51 on Friday, up 0.2% from the previous day but down 2% year-to-date.
Fears of an all-out trade war are the main factor behind the lackluster performance, said Hirokazu Kabeya, a stock market analyst at Daiwa Securities. He pointed to signs that the trade tit-for-tat is intensifying, with China and the European Union moving to counter unilateral U.S. tariffs.
"The escalating trade tensions have yet to impact the real economy," Kabeya said. "But they are raising concern about the economic outlook and making investors reluctant to take risks."
Also hurting market sentiment is the buildup of inflationary pressure in the U.S. This has investors expecting further interest rate increases by the Federal Reserve and an end to the "Goldilocks" global economy of relatively strong growth with low inflation.
Japanese investors are not alone in fretting over the global outlook.
