Japanese Market Sharply Higher

The Japanese stock market is sharply higher on Monday, recouping the losses in the previous two sessions, with the Nikkei 225 moving above the 32,600 level, following the mixed cues from global markets on Friday, with gains in most index heavyweights, exporters and technology stocks partially offset by weakness in financial stocks.

The benchmark Nikkei 225 Index is up 372.01 or 1.15 percent at 32,676.26, after touching a high of 32,756.62 earlier. Japanese shares ended notably lower on Friday.

Market heavyweight SoftBank Group is gaining almost 1 percent and Uniqlo operator Fast Retailing is advancing almost 3 percent. Among automakers, Honda is gaining almost 2 percent and Toyota is adding more than 1 percent.

In the tech space, Tokyo Electron is gaining almost 2 percent, Screen Holdings is adding almost 1 percent and Advantest is advancing more than 1 percent.

In the banking sector, Sumitomo Mitsui Financial is losing almost 1 percent, Mitsubishi UFJ Financial is declining almost 2 percent and Mizuho Financial is down almost 1 percent.

The major exporters are mostly higher. Sony, Canon and Panasonic are gaining more than 1 percent each, while Mitsubishi Electric is adding almost 1 percent.

Among other major gainers, Mitsubishi Motors is surging more than 7 percent and Mazda Motor is gaining almost 4 percent, while Hitachi Construction Machinery and Kobe Steel are adding more than 3 percent each. Furukawa Electric, Subaru, Nissan Motor, JFE Holdings, Japan Steel Works and Tokyu Fudosan Holdings are up almost 3 percent each.

Conversely, there are no other major losers.

In economic news, the manufacturing sector in Japan continued to contract in July, and at a faster pace, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 49.4. That’s down from 49.8 in June, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI fell from 54.0 in June to 53.9 in July.

In the currency market, the U.S. dollar is trading in the mid-141 yen-range on Monday.

On Wall Street, stocks showed a lack of direction throughout much of the trading day on Friday following the mixed performance seen during Thursday’s session. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day narrowly mixed. While the Nasdaq slipped 30.50 points or 0.2 percent to 14,032.81, the Dow inched up 2.51 points or less than a tenth of a percent to 35,227.69 and the S&P 500 crept up 1.47 points or less than a tenth of a percent to 4,536.34.

The major European markets also finished the day mixed. While the German DAX Index edged down 0.2 percent, the U.K.’s FTSE 100 Index rose 0.2 percent and the French CAC 40 Index climbed 0.7 percent.

Crude oil prices settled higher on Friday, lifted by data showing a drop in U.S. crude inventories and recent announcements by Saudi Arabia and Russia about crude output reductions. West Texas Intermediate Crude oil futures for September rose $1.42 or 1.9 percent at 77.07 a barrel. WTI Crude futures gained 2.3 percent in the week.

Market Analysis