Japanese Market Modestly Higher

The Japanese stock market is modestly higher on Monday, extending the gains in the previous two sessions, with the Nikkei 225 moving above the 29,700 level, following the broadly positive cues from Wall Street on Friday, on expectations of stronger stimulus package after data showed that Japan’s economy contracted more than expected in the third quarter.

The benchmark Nikkei 225 Index is up 121.74 points or 0.41 percent at 29,731.71, after touching a high of 29,861.88 earlier. Japanese shares ended significantly higher on Friday.

Market heavyweight SoftBank Group is gaining almost 2 percent, while Uniqlo operator Fast Retailing is edging down 0.3 percent. Among automakers, Honda is gaining more than 1 percent and Toyota is adding 1.5 percent.

In the tech space, Advantest is edging up 0.2 percent, Screen Holdings is adding almost 1 percent and Tokyo Electron is up more than 1 percent. In the banking sector, Sumitomo Mitsui Financial is gaining more than 2 percent and Mitsubishi UFJ Financial is adding more than 1 percent, while Mizuho Financial is losing almost 1 percent.

The major exporters are mostly higher, with Panasonic edging up 0.3 percent, Sony gaining almost 1 percent and Mitsubishi Electric is adding more than 1 percent, while Canon is edging down 0.2 percent.

Among the other major gainers, M3 and Yokohama Rubber is gaining almost 4 percent each, while Mazda Motor is adding more than 3 percent. Nexon, JTEKT and Taiyo Yuden are up almost 3 percent each.

Conversely, Ebara is losing more than 6 percent, Nippon Express is declining more than 5 percent and Dowa Holdings is down almost 4 percent, while JFE Holdings, Kobe Steel, Dai-ichi Life Holdings and Dai Nippon Printing are slipping more than 3 percent each. Kobe Steel, Dentsu Group, Mitsui E&S Holdings and J. Front Retailing is sliding almost 3 percent each.

In economic news, Japan’s gross domestic product contracted an annualized 3.0 percent on year in the third quarter of 2021, the Cabinet Office said in Monday’s preliminary report. That was well shy of expectations for a drop of 0.8 percent on year following the downwardly revised 1.5 percent increase in the three months prior (originally 1.9 percent). On a seasonally adjusted quarterly basis, GDP sank 0.8 percent – again missing forecasts for a fall of 0.2 percent following the downwardly revised 0.4 percent gain in the second quarter (originally 0.5 percent). Capital expenditure tumbled 3.8 percent on quarter versus forecasts for a decline of 0.6 percent following the upwardly revised 2.2 percent gain in the previous three months (originally 1.4 percent). Private consumption shed 1.1 percent on quarter versus expectations for a decline of 0.5 percent after climbing 0.9 percent in Q2.

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

On Wall Street, stocks all moved to the upside during trading on Friday following the mixed performance seen in the previous session. The Nasdaq and the S&P 500 extended the rebound seen on Thursday, while the Dow moved higher for the first time in four sessions.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow rose 179.08 points or 0.5 percent to 36,100.31, the Nasdaq jumped 156.68 points or 1 percent to 15,860.96 and the S&P 500 climbed 33.58 points or 0.7 percent to 4,682.85.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.5 percent, the German DAX Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.5 percent.

Crude oil futures tumbled sharply lower on Friday, weighed down by a firm dollar and a downward revision in global oil demand forecast by OPEC. West Texas Intermediate Crude oil futures for December ended down by $0.80 or 1 percent at $80.79 a barrel.

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