Japanese Market Significantly Lower

The Japanese stock market is significantly lower on Wednesday, giving up some of the gains in the previous two sessions, following the mixed cues from Wall Street overnight. The Nikkei 225 is falling to well below the 38,900 level, with losses exporters, auto makers and financial stocks. Traders remain cautious ahead of the cautious ahead of the Bank of Japan’s policy decision later in the week.

The benchmark Nikkei 225 Index is down 285.85 or 0.73 percent at 38,848.94, after hitting a low of 38,809.36 earlier. Japanese stocks ended modestly higher on Tuesday.

Market heavyweight SoftBank Group is edging up 0.2 percent, while Uniqlo operator Fast Retailing is losing 2.5 percent. Among automakers, Honda is edging down 0.2 percent and Toyota is down 1.5 percent.

In the tech space, Advantest is edging up 0.4 percent, while Tokyo and Screen Holdings are edging down 0.1 to 0.3 percent each.

In the banking sector, Mizuho Financial, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are losing more than 1 percent each.

Among the major exporters, Canon and Panasonic are losing almost 1 percent each, while Sony is declining almost 3 percent. Mitsubishi Electric is edging up 0.1 percent.

Among other major losers, Toho is losing almost 6 percent, while Japan Steel Works and Daiichi Sankyo are down more than 3 percent each. Recruit Holdings, Mitsubishi Estate, West Japan Railway, East Japan Railway and Keyence are declining almost 3 percent each.

Conversely, TDK is gaining more than 4 percent and Taiyo Yuden is adding almost 3 percent.

In economic news, producer prices in Japan were up 0.7 percent on month in May, the Bank of Japan said on Wednesday. That exceeded expectations for an increase of 0.4 percent and was up from the upwardly revised 0.5 percent gain in April (originally 0.3 percent).

On a yearly basis, producer prices climbed 2.4 percent – again topping forecasts for 2.0 percent and accelerating from the upwardly revised 1.1 percent gain in the previous month (originally 0.9 percent).

The export price index rose 0.1 percent on month, the bank said, while the import price index rose 0.9 percent.

In the currency market, the U.S. dollar is trading in the lower 157 yen-range on Wednesday.

On the Wall Street, stock indexes all moved to the downside in early trading on Tuesday but turned mixed over the course of the session. While the Nasdaq and the S&P 500 recovered from the early weakness to reach new record closing highs, the narrower Dow climbed off its worst levels but spent the rest of the day in negative territory.

The Nasdaq jumped 151.07 points or 0.9 percent to 17,343.55 and the S&P 500 rose 14.53 points or 0.3 percent to 5,375.32, but the Dow fell 120.62 points or 0.3 percent to 38,747.42.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index tumbled 1.3 percent, the U.K.’s FTSE 100 Index slumped by 1.0 percent and the German DAX Index fell by 0.7 percent.

Crude oil prices settled slightly higher Tuesday as caution reigned ahead of inventory data and the Federal Reserve’s monetary policy announcement. West Texas Intermediate crude oil futures for July ended up by $0.16 at $77.90 a barrel.

Market Analysis