Japanese Market Modestly Higher

The Japanese stock market is modestly higher on Thursday, snapping the two straight sessions of losses, with the benchmark Nikkei 225 just below the 29,000 mark, ignoring the negative cues overnight from Wall Street. However, traders remain concerned after the Japanese government extended the COVID-19 state of emergency to contain the spread of the virus, though the daily infection rates are steadily declining since it peaked in mid-May.

The benchmark Nikkei 225 Index is gaining 127.60 points or 0.44 percent to 28,988.40, after touching a high of 29,007.53 in earlier. Japanese shares ended modestly lower on Wednesday.

Market heavyweight SoftBank Group is losing 0.5 percent and Uniqlo operator Fast Retailing is edging down 0.1 percent. Among automakers, Toyota and Honda are edging down 0.2 percent each, while Mazda is losing almost 2 percent.

In the tech space, Advantest is gaining more than 1 percent, Screen Holdings is up almost 2 percent and Tokyo Electron are adding almost 3 percent.

In the banking sector, Sumitomo Mitsui Financial is losing almost 1 percent, Mizuho Financial is down more than 1 percent and Mitsubishi UFJ Financial is edging down 0.4 percent.

The major exporters are mixed. Mitsubishi Electric is losing more than 1 percent and Panasonic is down almost 1 percent, while Sony is adding almost 1 percent and Canon is gaining more than 1 percent.

Among the other major gainers, Shionogi & Co. is gaining more than 7 percent, Nippon Yusen K.K. is up almost 4 percent and Sumitomo Dainippon Pharma is adding more than 3 percent, while Kobe Steel, Toto, Mitsui O.S.K. Lines, Terumo, Amada and M3 are all rising almost 3 percent each. Kawasaki Kisen Kaisha, Chugai Pharmaceutical, Isuzu Motors and Daiichi Sankyo are up more than 2 percent each.

Conversely, Eisai is losing almost 7 percent and NH Foods is down more than 3 percent, While Citizen Watch and Nippon Express declining more than 2 percent each. Konica Minolta Inc. Nippon Suisan Kaisha, Z Holdings, Obayashi, Sekisui House and Taisei are down almost 2 percent each.

In economic news, producer prices in Japan were up 0.7 percent on month in May, the Bank of Japan said on Thursday. That exceeded expectations for an increase of 0.5 percent and was down from 0.9 percent in April. On a yearly basis, producer prices climbed 4.9 percent – again beating forecasts for 4.5 percent and up from an upwardly revised 3.8 gain in the previous month. This was the third straight month of producer price inflation and the highest since September 2008.

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

On Wall Street, stocks closed slightly weak on Wednesday as investors largely stayed cautious and refrained from making significant moves ahead of the much-awaited inflation data, due on Thursday. Despite continued optimism about strong economic rebound, the mood in the market was subdued due to concerns over rising inflation and fears about the Federal Reserve starting discussions on tapering its asset buying program sooner than expected.

Among the major averages, the Dow ended down by 152.68 points or 0.44 percent at 34,447.14. The S&P 500 closed lower by 7.71 points or 0.18 percent at 4,219.55, while the tech-laden Nasdaq edged down 13.16 points or 0.09 percent to 13,911.75.

The major European markets closed mixed on Wednesday with traders largely staying wary of building up positions. France’s CAC 40 advanced 0.19 percent, while the U.K.’s FTSE 100 ended 0.2 percent down and Germany’s DAX declined 0.38 percent.

Crude oil prices edged lower on Wednesday after data showed a jump in U.S. gasoline stockpiles last week. West Intermediate crude oil futures for July ended down $0.09 or 0.1 percent at $69.96 a barrel.

Market Analysis