Japanese Market Sharply Lower

The Japanese stock market is sharply lower after paring early gains on Thursday, extending the losses in the previous four sessions, with the benchmark Nikkei 225 staying above the 26,300 level, following the mixed cues overnight from Wall Street, as the raging spread of the coronavirus omicron variant in the country worsens.

Traders are also reacting to the hawkish comments from the US Federal Reserve, which indicated that it plans to begin raising interest rates “soon,” citing elevated inflation and a strong labor market.

Trades also remain concerned about the sharp spike in domestic new coronavirus infections, with daily new COVID-19 cases in Japan surging to a new record on Wednesday after it topped the 70,000 mark to push hospitals and clinics to the breaking point. The daily new cases also hit record highs each day since last week.

The benchmark Nikkei 225 Index is losing 674.83 points or 2.50 percent to 26,336.50, after hitting a low of 26,305.51 27,217.59 earlier. Japanese shares ended modestly lower on Wednesday.

Market heavyweight SoftBank Group is plunging more than 6 percent and Uniqlo operator Fast Retailing is losing almost 2 percent. Among automakers, Toyota is losing more than 1 percent, while Honda is edging up 0.2 percent.

In the tech space, Advantest is plunging more than 6 percent, Tokyo Electron is losing more than 4 percent and Screen Holdings is declining almost 5 percent.

In the banking sector, Mizuho Financial is edging down 0.5 percent and Sumitomo Mitsui Financial is edging down 0.2 percent, while Mitsubishi UFJ Financial is flat.

The major exporters are lower. Sony is losing almost 6 percent, Mitsubishi Electric is down more than 1 percent and Panasonic is declining almost 3 percent. Canon is flat.

In other news, shares in Japanese Marubeni Corp. are up more than 3 percent after the Japanese trading house said it will sell the grains business of its U.S. unit Gavilon to commodities trader Glencore PLC’s Viterra arm for $1.125 billion. Marubeni will retain Gavilon’s fertilizer business and some facilities for grain export.

Among the other major losers, CyberAgent is plunging more than 14 percent, Nitto Denko is sliding almost 7 percent, Sumco is losing more than 6 percent and Dowa Holdings is down more than 5 percent, while M3 and Recruit Holdings are declining almost 5 percent each. Toho Zinc and Fujitsu are slipping more than 4 percent each, while Bandai Namco, Nexon and Taiyo Yuden are down almost 4 percent each.

Conversely, Fanuc is gaining almost 4 percent.

In the currency market, the U.S. dollar is trading in the mid-114 yen-range on Thursday.

On Wall Street, stocks were mostly higher for much of the trading session on Wednesday but came under pressure in reaction to the Federal Reserve’s highly anticipated monetary policy announcement. The major averages all moved to the downside, although the Nasdaq managed to creep back above the unchanged line.

After surging as much as 3.4 percent, the tech-heavy Nasdaq pulled back well off its best levels but still inched up 2.82 points or less than a tenth of a percent to 13,542.12. Meanwhile, the Dow fell 129.64 points or 0.4 percent to 34,168.09 and the S&P 500 dipped 6.52 points or 0.2 percent to 4,349.93.

Meanwhile, the major European markets all moved sharply higher on the day. While the U.K.’s FTSE 100 Index jumped by 1.3 percent, the French CAC 40 Index and the German DAX Index surged up by 2.1 percent and 2.2 percent, respectively.

Crude oil futures settled higher on Wednesday as prices climbed amid rising geopolitical tensions. U.S. President Joe Biden has warned Moscow of damaging sanctions, including measures personally targeting President Vladmir Putin, if Russia invades Ukraine. West Texas Intermediate Crude oil futures for March ended higher by $1.75 or 2 percent at $87.35 a barrel, the highest settlement since October 2014.

Market Analysis