Japanese Market Modestly Higher

The Japanese stock market is modestly higher in choppy trading on Wednesday, recouping some of the losses in the previous session, with the Nikkei 225 moving above the 27,500 level, following the mixed cues overnight from Wall Street, boosted by gains in exporters and financial stocks, despite the continued volatility and weakness of the Japanese yen.

The benchmark Nikkei 225 Index is up 122.76 points or 0.47 percent at 26,509.39, after touching a high of 26,528.06 earlier. Japanese stocks closed sharply lower on Wednesday.

Market heavyweight SoftBank Group is gaining almost 1 percent, while Uniqlo operator Fast Retailing is losing 1.5 percent. Among automakers, Honda is adding 1.5 percent and Toyota is flat.

In the tech space, Screen Holdings is gaining 1.5 percent and Advantest is adding more than 4 percent, while Tokyo Electron is edging down 0.2 percent.

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

Among the major exporters, Sony is gaining 1.5 percent, Panasonic is up more than 1 percent, Canon is edging up 0.4 percent and Mitsubishi Electric is adding almost 2 percent.

Among the other major gainers, Fujikura is skyrocketing almost 15 percent, CyberAgent is surging more than 8 percent and Tokuyama is soaring more than 7 percent, while Fuji Electric and Daiichi Sankyo are gaining almost 5 percent each. Tokyo Gas is up more than 4 percent, while Keyence, Osaka Gas and TDK are adding almost 4 percent. DIC, Mitsui Chemicals, AGC, Nippon Express and Orix are advancing more than 3 percent each.

Conversely, Hitachi Construction Machinery is plunging almost 9 percent, while Konica Minolta and M3 are slipping more than 7 percent each. Kansai Electric Power is sliding almost 7 percent and Suzuki Motor is down almost 6 percent, while Keisei Electric Railway and Kikkoman are losing more than 5 percent. NEC is declining more than 3 percent.

In economic news, industrial production in Japan was up a seasonally adjusted 0.3 percent on month in March, the Ministry of Economy, Trade and Industry said in Thursday’s preliminary reading. That was shy of expectations for an increase of 0.5 percent and down from 2.0 percent in February. On a yearly basis, industrial production slipped 1.7 percent, also missing forecasts for a decline of 0.5 percent following the 0.5 percent increase in the previous month. Upon the release of the data, the METI maintained its assessment of industrial production, saying that it is showing signs of an upward movement.

The METI also said the value of retail sales in Japan was up a seasonally adjusted 2.0 percent on month in March, coming in at 13.628 trillion yen. That beat forecasts for an increase of 1 percent following the downwardly revised 0.9 percent decline in February (originally -0.8 percent).

For the first quarter of 2022, retail sales fell 0.8 percent on quarter but rose 0.4 percent on year at 37.389 trillion yen. On a yearly basis, retail sales jumped 0.9 percent – again topping expectations for 0.4 percent following the downwardly revised 0.9 percent decline in February (originally -0.8 percent).

The Bank of Japan will also wrap up its monetary policy meeting on Thursday and then release its quarterly report and its decision on interest rates. The BoJ is widely expected to keep its benchmark lending rate steady at -0.10 percent.

In the currency market, the U.S. dollar is trading in the higher 128 yen-range on Wednesday.

On Wall Street, stocks turned in a mixed performance on Wednesday with investors tracking quarterly earnings updates and closely following the developments on the geopolitical front. The mood remained cautious amid concerns about inflation and looming interest rate hikes.

The major averages finished the day on opposite sides of the unchanged line. The Dow closed at 33,301.93, up 61.75 points or 0.19 percent, the S&P 500 settled at 4,183.96 with a gain of 8.76 points or 0.21 percent and the Nasdaq ended down 1.81 points or 0.01 percent at 12,488.93.

Meanwhile, the major European markets all moved to the upside on the day. The U.K.’s FTSE 100 Index surged up 0.53 percent, Germany’s DAX gained 0.27 percent and France’s CAC 40 moved up 0.48 percent.

Crude oil prices climbed higher on Wednesday, lifted by data showing a drop in gasoline and distillate stockpiles last week. West Texas Intermediate Crude oil futures for June rose $0.32 or 0.3 percent at $102.02 a barrel.

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