Japanese Market Modestly Lower

The Japanese stock market is modestly lower on Thursday, extending the losses of the previous session, with the benchmark Nikkei 225 just above the 28,200 level, ignoring the positive cues overnight from Wall Street, as traders remain cautious amid the continued acceleration in the new wave of coronavirus cases, particularly in Olympic city Tokyo.

The Japanese government is planning to declare another COVID-19 state of emergency in Tokyo until August 22 to combat a recent surge in infections. The Tokyo metropolitan government reported 920 new infections on Wednesday, the highest figure since mid-May.

The benchmark Nikkei 225 Index is losing 158.91 points or 0.56 percent to 28,208.04, after hitting a low of 28,199.22 earlier. Japanese shares ended notably lower on Wednesday.

Market heavyweight SoftBank Group is edging down 0.2 percent and Uniqlo operator Fast Retailing is losing almost 1 percent. Among automakers, Toyota is edging up 0.2 percent, while Honda is losing more than 1 percent.

In the tech space, Advantest is losing more than 1 percent, Screen Holdings is declining almost 2 percent and Tokyo Electron is down more than 2 percent.

In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are edging down 0.3 percent each, while Mizuho Financial is edging up 0.2 percent.

The major exporters are mixed. Mitsubishi Electric and Panasonic are edging up 0.4 percent, while Canon is flat. Sony is edging down 0.3 percent.

Among the other major losers, Otsuka Holdings is losing more than 4 percent and Inpex is down more than 3 percent, while Japan Steel Works, Mitsui Chemicals, Isetan Mitsukoshi Holdings and Keisei Electric Railway are declining almost 3 percent each. Komatsu, ANA Holdings, Marui Group, TDK, Nikon and Alps Alpine are all down more than 2 percent each.

Conversely, Daikin Industries is gaining almost 5 percent and Tokyo Tatemono is adding almost 4 percent, Aeon is rising more than 3 percent and Hitachi Zosen is up more than 2 percent. Mitsui O.S.K. Lines, Rakuten Group, DIC and Fujikura are all gaining almost 2 percent each.

In economic news, Japan posted a current account surplus of 1,979.7 billion yen in May, the Ministry of Finance said on Thursday, up 85.3 percent on year. That exceeded expectations for a surplus of 1,820.4 billion following the 1,321.8 billion yen surplus in April. Exports jumped 46.5 percent on year to 6,183.2 billion yen, while imports spiked an annual 6,181.2 billion yen for a trade surplus of 2.0 billion yen. The capital account showed a deficit of 2.0 billion yen and the financial account had a surplus of 2,703.8 billion yen.

The value of overall bank lending in Japan was up 1.4 percent on year in June, the Bank of Japan said on Thursday – coming in at 577.832 trillion yen. That follows the downwardly revised 2.8 percent increase in May (originally 2.9 percent). Excluding trusts, bank lending rose an annual 0.8 percent to 501.459 trillion yen while lending from trusts climbed 5.6 percent on year to 76.373 trillion yen. Lending from foreign banks jumped an annual 9.3 percent to 3.545 trillion yen. For the second quarter of 2021, bank lending climbed 3.0 percent on year, slowing from the 6.1 percent growth in the three months prior.

In the currency market, the U.S. dollar is trading in the mid-110 yen-range on Thursday.

On Wall Street, stocks fluctuated over the course of the trading day on Wednesday before eventually ending the session modestly higher. With the uptick on the day, the S&P 500 and the Nasdaq once again reached new record closing highs.

The major averages all closed in positive territory, although the Nasdaq inched up just 1.42 points or less than a tenth of a percent to 14,665.06. The Dow climbed 104.42 points or 0.3 percent to 34,681.79 and the S&P 500 rose 14.59 points or 0.3 percent to 4,358.13.

The major European markets also moved to the upside on the day. While the German DAX Index jumped by 1.2 percent, the U.K.’s FTSE 100 Index climbed by 0.7 percent and the French CAC 40 Index rose by 0.3 percent.

Crude oil prices tumbled on Wednesday amid concerns that several leading oil producers will increase output following a disagreement over policy. West Texas Intermediate Crude oil futures for August ended down $1.17 or 1.6 percent at $72.20 a barrel.

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