Japanese Market Significantly Lower

The Japanese stock market is significantly lower on Wednesday, giving up the gains in the previous session, with the Nikkei 225 falling below the 26,000 mark, following the broadly negative cues overnight from Wall Street, as traders remained concerned about faster interest rate hikes after US data showed higher-than-expected core inflation reading.

The benchmark Nikkei 225 Index is down 232.85 points or 0.89 percent at 25,980.79, after hitting a low of 25,688.11 earlier. Japanese stocks closed slightly higher on Wednesday.

Market heavyweight SoftBank Group is losing more than 5 percent and Uniqlo operator Fast Retailing is declining almost 4 percent. Among automakers, Honda is edging up 0.2 percent and Toyota is adding more than 1 percent.

In the tech space, Screen Holdings is gaining more than 2 percent, while Advantest is losing more than 2 percent and Tokyo Electron is declining almost 2 percent.

In the banking sector, Mizuho Financial is edging up 0.2 percent, Mitsubishi UFJ Financial is adding almost 1 percent and Sumitomo Mitsui Financial is edging up 0.4 percent.

Among the major exporters, Sony is gaining more than 2 percent, Panasonic is edging up 0.3 percent, while Canon and Mitsubishi Electric are adding almost 1 percent each.

Among the other major losers, Sharp is plunging more than 8 percent, while Oki Electric Industry and M3 are slipping almost 8 percent each. Kao is sliding more than 6 percent and Z Holdings is down more than 4 percent, while Denka, Chugai Pharmaceutical, Odakyu Electric Railway, Suzuki Motor and Tokai Carbon are declining almost 4 percent each. Rakuten Group is losing more than 3 percent.

Conversely, Japan Steel Works is skyrocketing more than 18 percent, Hitachi Zosen is soaring more than 14 percent, Kobe Steel is surging almost 13 percent and Olympus is rising more than 11 percent, while Pacific Metals, IHI and Toppan are gaining more than 6 percent each. Mazda Motor is up more than 5 percent, while Mitsubishi Motors and Idemitsu Kosan are adding almost 5 percent each. Kawasaki Heavy Industries is up more than 4 percent, while JGC Holdings, Marubeni and Mitsubishi Heavy Industries are advancing more than 3 percent each.

In economic news, Japan posted a current account surplus of 2,549.3 billion yen in March, the Ministry of Finance said on Thursday – up 2.8 percent on year. That beat forecasts for a surplus of 1,752.3 billion yen and was up from 1,648.3 billion yen in February. Exports were up 15.7 percent on year to 8,456.1 billion yen and imports surged 36.6 percent to 8,622.1 billion yen for a trade deficit of 166.1 billion yen. The capital account showed a deficit of 39.5 billion yen and the financial account had a surplus of 1,515.9 billion yen.

The value of overall bank lending in Japan was up 0.9 percent on year in April, the Bank of Japan said on Thursday – coming in at 584.726 trillion yen. That’s up from 0.5 percent in March. Excluding trusts, bank lending jumped 1.1 percent on year to 508.305 trillion yen, also accelerating from 0.5 percent in the previous month. Lending from trusts fell 0.1 percent on year to 76.420 trillion yen, while lending from foreign banks advanced an annual 0.7 percent to 3.569 trillion yen.

In the currency market, the U.S. dollar is trading in the higher 129 yen-range on Wednesday.

On Wall Street, stocks saw considerable volatility in morning trading on Wednesday before once again coming under substantial selling pressure in the afternoon. With the steep drop on the day, the major averages all ended the session at their lowest closing levels in over a year.

The major averages saw further downside going into the close, ending the day near their lows of the session. The Dow slumped 326.63 points or 1 percent to 31,834.11, the Nasdaq plunged 373.44 points or 3.2 percent to 11,364.24 and the S&P 500 tumbled 65.87 points or 1.7 percent to 3,935.18.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index surged by 2.5 percent, the German DAX Index shot up by 2.2 percent and the U.K.’s FTSE 100 Index jumped by 1.4 percent.

Crude oil prices climbed higher on Wednesday, rebounding sharply from recent losses thanks to data showing a significant drop in flows of Russian gas to Europe. West Texas Intermediate Crude oil futures for June ended higher by $5.95 or 6 percent at $105.71 a barrel.

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