Japan's Nikkei slumps on trade war worries, stronger yen

TOKYO (Reuters) -Japan's Nikkei share average slumped nearly 5% on Friday in a brutal end to a volatile week as investors worried about the economic fallout from the rapidly escalating U.S.-China trade war as well as a strong yen that has been lifted by safe-haven flows.

As of GMT, the Nikkei was down 4.8% at 32,931.30. The broader Topix slipped 4.7% to 2,419.67.

"Risk in equities is too high right now with such huge volatilities every day. The best thing to do, I would say, is to stay away from the market," said Yusuke Sakai, a senior trader at T&D Asset Management.

The Nikkei posted a 9% jump on Thursday, its biggest one-day gain since August, after falling 4% in the previous session. On Tuesday, the index rebounded 6% from a 1-1/2-year low on Monday.

"Equities rise as long as companies grow, but I am afraid that they may not be able to disclose their outlook, and even if they do, it could be conservative. That may push the Nikkei to a new low," said Sakai.

Japanese companies will start announcing their outlook for this fiscal year from the end of this month.

All three major U.S. stock indexes suffered steep losses overnight, forfeiting much of the previous session's gains as growing concerns over the escalating Washington-Beijing trade face-off dampened optimism over upbeat economic data and U.S.-Europe trade negotiations. [.N]

The dollar slumped 1% to 142.88 yen to its lowest since September 30 on safe-haven bets.

A stronger Japanese currency tends to hurt shares of exporters, as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.

Uniqlo-brand owner Fast Retailing lost 3.29% to drag the Nikkei the most. Chip-related stocks Tokyo Electron and Advantest slipped 2.8% and 8%, respectively.

Of the 225 Nikkei components, all but three stocks fell.

Baycurrent jumped 7.7% after the consulting firm raised its annual net profit forecast and announced a share buyback.

(Reporting by Junko Fujita; Editing by Alan Barona and Mrigank Dhaniwala)