Japanese Market Sharply Lower; Down 2.4%

The Japanese stock market is trading sharply lower on Monday, giving up the gains in the previous session. The benchmark S&P/ASX 200 is plunging 900 points to below the 38,800 level, following the broadly negative cues from Wall Street on Friday, with weakness across most sectors led by index heavyweights and technology stocks.

The benchmark Nikkei 225 Index is down 947.67 or 2.39 percent at 38,741.27, after hitting a low of 38,698.22 earlier. Japanese shares ended modestly higher on Friday.

Market heavyweight SoftBank Group is losing more than 5 percent and Uniqlo operator Fast Retailing is down more than 1 percent. Among automakers, Honda is losing almost 2 percent and Toyota is declining more than 3 percent.

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

In the banking sector, Sumitomo Mitsui Financial, Mizuho Financial and Mitsubishi UFJ Financial are losing more than 3 percent each.

The major exporters are lower. Canon is losing more than 3 percent and Sony is down 1.5 percent, while Mitsubishi Electric and Panasonic are declining almost 3 percent each.

Among other major losers, Renesas Electronics, Mitsui Mining & Smelting and Pacific Metals are losing almost 5 percent each, while Yaskawa Electric, Toyota Tsusho and Minebea Mitsumi are declining more than 4 percent, while JTEKT, Fujikura, Nissan Motor, Kawasaki Heavy Industries and Hitachi are down almost 4 percent.

Conversely, Dai Nippon Printing is gaining more than 4 percent and Teijin is advancing more than 3 percent.

In economic news, Japan’s gross domestic product expanded a seasonally adjusted 0.1 percent on quarter in the fourth quarter of 2023, the Cabinet Office said on Monday. That was shy of forecasts for an increase of 0.3 percent following the 0.7 percent contraction in the previous three months.

On an annualized basis, GDP was up 0.4 percent – exceeding expectations for a contraction of 0.4 percent after slumping 2.9 percent in the three month prior. GDP capital expenditure was up 2.0 percent on quarter, topping forecasts for a decline of 0.1 percent after slipping 0.4 percent in Q3.

The Bank of Japan also said the M2 money stock in Japan was up 2.5 percent on year in February, on Monday – coming in at 1,238.9 trillion yen. That exceeded forecasts for an increase of 2.4 percent and was unchanged from the January reading following an upward revision from 2.4 percent.

The M3 money stock was up an annual 1.8 percent for the second straight month, now at 1,593.2 trillion yen. The L money stock rose 2.3 percent on year to 2,125.5 trillion yen, easing from the 2.5 percent gain in the previous month.

In the currency market, the U.S. dollar is trading in the higher 146 yen-range on Monday.

On Wall Street, stocks moved mostly higher in early trading on Friday but showed a notable downturn over the course of the session. The major averages pulled back well off their early highs, with the tech-heavy Nasdaq showing a particularly steep drop.

The major averages staged a failed recovery attempt in the latter part of the session, ending the day firmly in the red. The Nasdaq tumbled 188.26 points or 1.2 percent to 16,085.11, the S&P 500 slid 33.67 points or 0.7 percent to 5,123.69 and the Dow dipped 68.66 points or 0.2 percent to 38,722.69.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index edged up by 0.2 percent, the German DAX Index dipped by 0.2 and the U.K.’s FTSE 100 Index fell by 0.4 percent.

Crude oil prices fell on Friday amid uncertainty about the outlook for demand, particularly from China after data showed a drop in the country’s oil imports in the first two months of the year. West Texas Intermediate Crude oil futures for April shed $0.92 or 1.2 percent at $78.01 a barrel. WTI crude futures sank 2.5 percent in the week.

Market Analysis