Japanese Market Significantly Higher

The Japanese stock market is significantly higher on Wednesday, extending the gains in the previous two sessions, with the benchmark Nikkei index below the 28,400 level, ignoring the negative cues overnight from Wall Street, on domestic political developments. However, traders remain extremely concerned as the country continues to struggle to contain the rapid spread of the delta variant of the coronavirus.

There are reports that Prime Minister Yoshihide Suga is considering replacing the ruling party’s unpopular secretary-general, Toshihiro Nikai, ahead of a party leadership election.

The benchmark Nikkei 225 Index is gaining 272.89 points or 0.97 percent to 28,362.43, after touching a high of 28,445.13 earlier. Japanese stocks closed significantly higher on Tuesday.

Market heavyweight SoftBank Group is edging up 0.5 percent and Uniqlo operator Fast Retailing is gaining almost 1 percent. Among automakers, Honda is edging up 0.2 percent and Toyota is adding almost 1 percent.

In the tech space, Screen Holdings, Advantest and Tokyo Electron are edging down 0.2 percent each.

In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent, while Mizuho Financial and Mitsubishi UFJ Financial are adding more than 1 percent each.

Among the major exporters, Panasonic is gaining almost 1 percent, Canon is up more than 1 percent and Sony is edging up 0.4 percent, while Mitsubishi Electric is edging down 0.2 percent and Canon is flat.

Among the other major gainers, Komatsu is gaining more than 4 percent, while Oji Holdings, Yamaha and Omron are adding almost 4 percent each. Taiyo Yuden, DeNA and Toho are up more than 3 percent each. Takara Holdings, Shinsei Bank, Asahi Group, NEXON and Nikon are rising almost 3 percent each.

Conversely, Z Holdings, Kawasaki Kisen Kaisha and Mitsui Chemicals are losing almost 2 percent each.

In economic news, the manufacturing sector in Japan continued to expand in August, albeit at a slower pace, the latest report from Jibun Bank showed on Wednesday with a manufacturing PMI score of 52.7. That’s down from 53.0 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

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

On Wall Street, stocks showed a lack of direction over the course of the trading session on Tuesday before ending the day modestly lower. Trading activity was relatively subdued, leading to the lackluster performance.

The major averages ended the day just below the unchanged line. The Dow slipped 39.11 points or 0.1 percent to 35,360.73, the Nasdaq edged down 6.66 points or less than a tenth of a percent to 15,259.24 and the S&P 500 dipped 6.11 points or 0.1 percent to 4,522.68.

The major European markets also moved to the downside on the day. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index and the U.K.’s FTSE 100 Index fell by 0.3 percent and 0.4 percent, respectively.

Crude oil futures slipped Tuesday on concerns about likely excess supply in the market with OPEC and allies set to increase production, as well as the restoration of crude output in the U.S. after Hurricane Ida. West Texas Intermediate Crude oil futures for October fell $0.71 or 1 percent to $68.50 a barrel.

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