Japanese Market Sharply Lower

The Japanese stock market is sharply lower on Thursday, extending the sharp losses of the previous two sessions, with the Nikkei 225 again losing more than 500 points to break below the 27,000 mark, following the broadly negative cues overnight from Wall Street as rising inflation concerns prompted a sell-off. The accelerating daily coronavirus infection rates are also dampening market sentiment.

According to the Health Ministry, the number of COVID-19 patients with severe symptoms in Japan rose to a fresh record 1,189. The country’s government has expanded and extended the coronavirus-induced state of emergency in several areas.

The benchmark Nikkei 225 Index is losing 510.64 points or 1.81 percent to 27,636.87, after hitting a low of 27,534.39 earlier. Japanese shares ended significantly lower on Wednesday.

Market heavyweight SoftBank Group is plunging more than 7 percent and Uniqlo operator Fast Retailing is losing more than 3 percent. Among automakers, Honda is gaining almost 1 percent, while Toyota is losing more than 1 percent.

In the tech space, Advantest is losing almost 6 percent, Screen Holdings is declining more than 4 percent and Tokyo Electron is down almost 5 percent. In the banking sector, Mitsubishi UFJ Financial is gaining more than 1 percent, Sumitomo Mitsui Financial is up almost 2 percent and Mizuho Financial is adding almost 1 percent.

The major exporters are mostly lower. Mitsubishi Electric is edging down 0.5 percent, Sony is losing almost 2 percent, Canon is declining more than 2 percent and Panasonic is down almost 1 percent.

Among the other major losers, Nexon in plummeting almost 15 percent, NEC is plunging almost 12 percent, JEC is losing almost 11 percent, Toppan Printing is down more than 7 percent and Denka is declining 6 percent. CyberAgent is lower by almost 6 percent and Terumo is losing more than 5 percent.

Conversely, Marui Group is gaining almost 7 percent, UBE Industries is adding almost 7 percent Seven & I Holdings is up more than 6 percent and GS Yuasa is rising more than 4 percent. Amada, Kirin Holdings and Shizuoka Bank are gaining almost 4 percent each.

In economic news, Japan posted a current account surplus of 2,650.1 billion yen in March, the Ministry of Finance said on Thursday – up 37.3 percent on year. That missed expectations for a surplus of 2,796.2 billion yen and was down from 2,916.9 billion yen in February.

Separately, the Bank of Japan said on Thursday the value of overall bank lending in Japan was up 4.8 percent on year in April, coming in at 579.574 trillion yen. That follows the downwardly revised 6.2 percent increase in March (originally 6.3 percent). Excluding trusts, bank lending was up an annual 4.3 percent at 503.081 trillion yen – slowing from 5.9 percent in the previous month.

In the currency market, the U.S. dollar is trading in the higher 109 yen-range on Thursday.

On Wall Street, stocks moved sharply lower over the course of the trading day on Wednesday, extending the pullback seen earlier in the week. With the steep drop on the day, the major averages ended the session at their lowest closing levels in over a month.

The major averages saw further downside going into the close, ending the day just off their lows of the session. The Dow tumbled 681.50 points or 2 percent to 33,587.66, the Nasdaq plummeted 357.75 points or 2.7 percent to 13,031.68 and the S&P 500 plunged 89.06 points or 2.1 percent to 4,063.04.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.8 percent, the German DAX Index and the French CAC 40 Index both edged up by 0.2 percent.

Crude oil prices moved higher on Wednesday on optimism about the outlook for energy demand and data showing a drop in crude stockpiles last week. West Texas Intermediate Crude oil futures for June ended up by $0.80 or 1.2 percent at $66.08 a barrel.

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