Asian shares slip as Japan 'tankan' shows weaker outlook

TOKYO (AP) — Asian shares were mostly lower Friday as a resurgence of Russian attacks dashed hopes for any quick end to the war in Ukraine.

The retreat followed a broad decline on Wall Street, which closed out its worst quarter since the pandemic broke out two years ago.

A closely watched quarterly gauge of business sector sentiment in Japan called the “tankan,” carried out by the Bank of Japan, found the benchmark indicator for large manufacturers dropped for the first time in seven quarters, losing three points from a survey in December to 14 points from 17 points.

The war in Ukraine, coming on top of supply chain disruptions at top manufacturers caused by COVID-19 restrictions and growing worries about inflation, especially soaring energy costs, are clouding the outlook for already fragile growth in the world's third largest economy.

The war is the biggest single factor weighing on markets, analysts say. Ukrainian President Volodymyr Zelenskyy expressed pessimism about Russian intentions and said in his nightly video address to the nation that he expected the Russian offensive would continue for some time.

“As we head into the weekend break, optimism for a ceasefire in the geopolitical conflict continues to fade overnight,” said Yeap Jun Rong, market strategist at IG in Singapore.

Japan’s benchmark Nikkei 225 slipped 0.4% in afternoon trading to 27,698.25.

Shares in electronics and energy giant Toshiba Corp. jumped 6.5% on news that Bain Capital might make an offer to acquire the company and take it private. Toshiba said it was not involved in any such talks.

South Korea’s Kospi lost 0.7% to 2,739.58. Australia’s S&P/ASX 200 edged down 0.8% to 7,493.80. Hong Kong’s Hang Seng shed 1.0% to 21,772.56, while the Shanghai Composite added 0.8% to 3,276.99.

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