Japanese Market Significantly Lower

The Japanese stock market is significantly lower on Tuesday, giving up some of the gains in the previous three sessions, with the benchmark Nikkei index above the 28,200 level, following the firmly negative cues from Wall Street overnight, with the main opposition party pledging to raise capital gains tax for rich individuals and large companies as part of their election campaign.

The domestic coronavirus situation is also a cause of worry as the opening of dining at restaurants is expected to lead to an increase in case count.

The benchmark Nikkei 225 Index is losing 257.02 points or 0.90 percent to 28,241.18, after hitting a low of 28,166.38 earlier. Japanese shares closed sharply higher on Monday.

Market heavyweight SoftBank Group and Uniqlo operator Fast Retailing are losing almost 3 percent each. Among automakers, Honda is gaining more than 1 percent and Toyota is edging up 0.1 percent.

In the tech space, Advantest is losing 1.5 percent, Screen Holdings is down more than 1 percent and Tokyo Electron is edging down 0.3 percent. In the banking sector, Mitsubishi UFJ Financial is edging down 0.4 percent, while Sumitomo Mitsui Financial and Mizuho Financial are flat.

The major exporters are lower, with Sony is flat, Canon is down almost 1 percent, Mitsubishi Electric is edging down 0.4 percent and Panasonic is edging down 0.2 percent.

Among the other major losers, J. Front Retailing is losing almost 6 percent, while Z Holdings and Takashimaya are down more than 3 percent each. Yaskawa Electric and Tokyu is lower by almost 3 percent each, while Rakuten Group, Marui Group, Keisei Electric Railway, Odakyu Electric Railway, Dai-ichi Life, Shiseido and Tobu Railway are declining more than 2 percent each.

Conversely, Toho Zinc is gaining more than 5 percent, Pacific Metals is adding almost 5 percent, Sumitomo Metal Mining is rising almost 4 percent and Mazda Motor is up almost 3 percent, while Nippon Light Metal, Mitsubishi Motors, Mitsui O.S.K. Lines, Kawasaki Heavy Industries and JFE Holdings are adding more than 2 percent each.

In economic news, producer prices in Japan were up 0.3 percent on month in September, the Bank of Japan said on Tuesday, in line with expectations following the flat reading in August. On a yearly basis, producer prices climbed 6.3 percent – exceeding forecasts for 5.9 percent and accelerating from 5.5 percent in the previous month. Export prices were up 0.3 percent on month and 11.0 percent on year, the bank said, while import prices rose 1.1 percent on month and skyrocketed 31.1 percent on year.

The Bank of Japan also said the value of overall bank lending in Japan was up 0.6 percent on year in September, coming in at 577.140 trillion yen. That follows the 0.6 percent annual increase in August.

In the currency market, the U.S. dollar is trading in the lower 113 yen-range on Tuesday.

On Wall Street, stocks moved mostly lower over the course of the trading day on Monday after moving to the upside early in the session. With the downturn on the day, the major averages added to the modest losses posted during last Friday’s session.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow slid 250.19 points or 0.7 percent to 34,496.06, the Nasdaq fell 93.34 points or 0.6 percent to 14,486.20 and the S&P 500 dropped 30.15 points or 0.7 percent to 4,361.19.

Meanwhile, the major European markets finished the day mixed. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index crept up by 0.2 percent and the U.K.’s FTSE 100 Index advanced by 0.7 percent.

Crude oil futures spiked Monday with falling inventories, the OPEC decision to stick with a gradual production increase, and the ongoing energy crunch supporting oil prices. West Texas Intermediate Crude oil futures for November rose $1.17 or 1.5 percent to $80.52 a barrel.

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