Japanese Market Sharply Higher

Extending the gains in the previous two sessions, the Japanese market is sharply higher on Thursday, following the broadly positive cues from Wall Street overnight. The Nikkei 225 is moving above the 40,500 level to fresh all-time highs, with gains across most sectors led by index heavyweights and financial stocks as traders react to the US Fed reaffirming expectations for three interest rate cuts this year.

The benchmark Nikkei 225 Index is up 506.44 points or 1.27 percent to 40,510.04, after again touching an all-time high of 40,748.77 earlier. Japanese shares ended notably higher on Tuesday ahead of the holiday on Wednesday.

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

In the tech space, Advantest is edging up 0.2 percent, Tokyo Electron is adding more than 2 percent and Screen Holdings is gaining more than 1 percent.

In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent, while Mitsubishi UFJ Financial and Mizuho Financial are adding almost 2 percent each.

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

Among other major gainers, Nidec and UBE are gaining more than 5 percent each, while Mitsui & Co., Concordia Financial Group, Taisei, NEXON, Amada and Isetan Mitsukoshi are adding more than 4 percent each. Sumco, Sumitomo Pharma, Mitsubishi Heavy Industries, Hitachi and Marubeni are advancing almost 4 percent each. Toppan Holdings is up more than 3 percent.

Conversely, there are no other major losers.

In economic news, the manufacturing sector in Japan continued to contract in March, albeit at a slower pace, the latest survey from Jibun Bank revealed on Thursday with a manufacturing PMI score of 48.2. That’s up from 47.2 in February, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI improved to 54.9 in March from 52.9 in February.

Meanwhile, Japan posted a merchandise trade deficit of 379.4 billion yen in February, the Ministry of Finance said on Thursday. That beat forecasts for a deficit of 810.2 billion yen following the 1,758.3 billion yen shortfall in January.

Exports jumped 7.8 percent on year, topping expectations for an increase of 5.3 percent following the 11.9 percent gain in the previous month. Imports rose 0.5 percent on year versus expectations for a gain of 2.2 percent following the downwardly revised 9.8 percent drop a month earlier (originally -9.6 percent).

In the currency market, the U.S. dollar is trading in the lower 150 yen-range on Thursday.

On Wall Street, stocks showed a lack of direction throughout much of the trading session on Wednesday before rallying following the Federal Reserve’s monetary policy announcement. The major averages all showed strong moves to the upside, reaching new record closing highs.

The major averages reached new highs for the session in the final hour of trading, ending the day sharply higher. The Dow jumped 401.37 points or 1.0 percent to 39,512.13, the Nasdaq surged 202.62 points or 1.3 percent to 16,369.41 and the S&P 500 advanced 46.11 points or 0.9 percent at 5,224.62.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose 0.2 percent, the U.K.’s FTSE 100 Index closed just below the unchanged line and the French CAC 40 Index slid by 0.5 percent.

Crude oil prices fell sharply on Wednesday as traders chose to take some profits following recent gains, while a firm dollar also weighed on oil prices. West Texas Intermediate Crude oil futures for April slumped $1.79 or 2.1 percent at $81.68 a barrel.

Market Analysis