Japanese Market Sharply Lower

The Japanese stock market is sharply lower on Friday, giving up all the gains of the previous session, with the benchmark Nikkei 225 losing more than 400 points to be just above the 27,300 level, ignoring the broadly positive cues overnight from Wall Street, as traders are concerned about the continued restrictions in economic activity amid the spike in the recent fresh wave of COVID-19 infections.

The benchmark Nikkei 225 Index is losing 453.96 points or 1.63 percent to 27,328.46, after hitting a low of 27,294.05 earlier. Japanese shares closed significantly higher on Thursday.

Market heavyweight SoftBank Group is losing almost 3 percent and Uniqlo operator Fast Retailing is down more than 1 percent. Among automakers, Honda is losing more than 1 percent and Toyota is edging down 0.3 percent.

In the tech space, Advantest and Tokyo Electron are losing more than 1 percent each, while Screen Holdings is edging down 0.1 percent. In the banking sector, Mitsubishi UFJ Financial is edging down 0.5 percent and Sumitomo Mitsui Financial is edging down 0.2 percent, while Mizuho Financial is edging up 0.2 percent.

Among major exporters, Mitsubishi Electric is edging down 0.5 percent, Sony is losing almost 2 percent and Panasonic is down more than 3 percent, while Canon is flat.

Among the other major losers, Sumitomo Dainippon Pharma is losing more than 10 percent, while Fujitsu and Fuji Electric are down more than 9 percent each. Konica Minolta is declining almost 7 percent, Fanuc down almost 6 percent, Isetan Mitsukoshi Holdings is lower by almost 5 percent and Shiseido is losing more than 4 percent, while Alps Alpine and Tokyo Electric Power is down almost 4 percent each. Nippon Electric Glass, NTN, Credit Saison, Astellas Pharma and NEC are losing more than 3 percent each.

Conversely, Omron is gaining more than 2 percent and Sumitomo Mitsui Trust Holdings is down almost 2 percent.

In economic news, the jobless rate in Japan came in at a seasonally adjusted 2.9 percent in June, the Ministry of Internal Affairs and Communications said on Friday. That was beneath expectations for 3.0 percent, which would have been unchanged from the May reading. The participation rate was 62.4 percent, up from 62.2 percent a month earlier.

Further, the Ministry of Economy, Trade and Industry (METI) said on Friday Industrial production in Japan was up a seasonally adjusted 6.2 percent on month in June,. That beat expectations for an increase of 5.0 percent following the downwardly revised 6.5 percent contraction in May (originally -5.9 percent). On a yearly basis, industrial production spiked 22.6 percent – roughly in line with expectations following the 21.1 percent gain in the previous month.

The METI also said the total value of retail sales in Japan was up a seasonally adjusted 3.1 percent on month in June. That beat expectations for an increase of 2.5 percent following the upwardly revised 0.3 percent contraction in May (originally -0.4 percent). On a yearly basis, retail sales rose 0.1 percent – shy of expectations for an increase of 0.2 percent following the upwardly revised 8.3 percent gain in the previous month (originally 8.2 percent).

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

On Wall Street, stocks moved mostly higher during trading on Thursday, following the mixed performance seen in the previous session. With the upward move on the day, the Dow and the S&P 500 set new record intraday highs.

The major averages pulled back off their best levels in afternoon trading but managed to remain positive. The Dow climbed 153.60 points or 0.4 percent to 35,084.53, the Nasdaq inched up 15.68 points or 0.1 percent to 14,778.26 and the S&P 500 rose 18.51 points or 0.4 percent to 4,419.15.

The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.9 percent, the German DAX Index and the French CAC 40 Index rose by 0.5 percent and 0.4 percent, respectively.

Crude oil futures settled higher Thursday as data showing a drop in U.S. crude inventories continued to support oil prices, while a weak dollar also contributed. West Texas Intermediate Crude oil futures for September ended up $1.23 or 1.7 percent at $73.62 a barrel.

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