Japanese Market Modestly Higher

The Japanese stock market is modestly higher after being in the red briefly earlier on Wednesday, extending the gains in the previous seven sessions, with the benchmark Nikkei index breaking above the 30,000 mark, following the mixed cues overnight from Wall Street, on better-than-expected GDP numbers and domestic political developments, even as traders remain extremely concerned as the country continues to struggle to contain the rapid spread of the delta variant of the coronavirus.

The benchmark Nikkei 225 Index is gaining 280.96 points or 0.94 percent to 30,197.10, after touching a high of 30,241.87 and a low of 29,787.13 earlier. Japanese stocks closed significantly higher on Tuesday.

Market heavyweight SoftBank Group is surging almost 8 percent, while Uniqlo operator Fast Retailing is losing almost 1 percent. Among automakers, Honda is gaining more than 1 percent and Toyota is flat.

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

In the banking sector, Sumitomo Mitsui Financial and Mizuho Financial are gaining almost 1 percent each, while Mitsubishi UFJ Financial is adding more than 2 percent.

Among the major exporters, Panasonic is gaining more than 1 percent, Mitsubishi Electric is adding almost 1 percent and Canon is edging up 0.1 percent, while Sony is edging down 0.5 percent.

Among the other major gainers, Rakuten Group is gaining almost 4 percent, while GS Yuasa, SKY Perfect JSAT Holdings, Hitachi Zosen and Shiseido adding almost 3 percent each.

Conversely, Kawasaki Kisen Kaisha, JFE Holdings, Kikkoman, Nisshin Seifun Group, Nippon Express, Fujikura and Maruha Nichiro are losing almost 2 percent each.

In economic news, Japan’s gross domestic product was up 1.9 percent on year in the second quarter of 2021, the Cabinet Office said on Wednesday. That exceeded expectations for an increase of 1.6 percent following the 3.7 percent contraction in the previous three months. On a seasonally adjusted quarterly basis, GDP was up 0.5 percent – again exceeding expectations for 0.4 percent after sinking 0.9 percent in the three months prior. Capital expenditure rose 2.3 percent on quarter, beating forecasts for 2.0 percent after slipping 1.3 percent in the first quarter.

Japan had a current account surplus of 1.910 trillion yen in July, the Ministry of Finance said on Wednesday, up 24.5 percent on year. That was shy of expectations for a surplus of 2.30 trillion following the 905.1 billion yen surplus in June. Exports were up 37.5 percent on year at 7.220 trillion yen, while imports jumped an annual 29.3 percent to 6.598 trillion yen for a trade surplus of 622.3 billion yen. The capital account showed a deficit of 5.0 billion yen following the 36.7 billion yen shortfall a month earlier.

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

On Wall Street, stocks ended mixed on Tuesday after a somewhat cautious session with investors weighing the likely impact of surging coronavirus of the Delta variant on the pace of economic recovery. Expectations that the Federal Reserve will hold its accommodative monetary policy for a longer duration helped limit the market’s downside.

The Nasdaq closed at a fresh record high, while the Dow and the S&P 500 drifted lower. The Dow ended down by 269.09 points or 0.76 percent at 35,100.00. The S&P 500 settled at 4,520.03, recording a loss of 15.40 points or 0.34 percent, while the Nasdaq ended up by 10.81 points or 0.07 percent at 15,374.33, after climbing to a new all-time high of 15,403.44.

Meanwhile, the major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 ended down by 0.53 percent, Germany’s DAX slid 0.56 percent and France’s CAC 40 shed 0.26 percent.

Crude oil futures settled notably lower on Tuesday amid renewed worries about the outlook for energy demand due to continued surge in coronavirus cases in several countries. The drop in prices was also due to Saudi Arabia’s decision to slash crude prices for Asia. West Texas Intermediate Crude oil futures for October ended down $0.94 or 1.4 percent at $68.35 a barrel.

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