Japanese Market Sharply Lower

The Japanese stock market is trading sharply lower on Wednesday, giving up the sharp gains in the previous session, following the broadly negative cues from Wall Street overnight. The Nikkei 225 is falling to stay a tad above the 38,000 mark, with weakness across all sectors led by index heavyweights and technology stocks.

An escalation in tensions in the Middle East weighed on market sentiment, after Iran launched a missile attack on Israel, aiming to avenge the killing of Hezbollah head Hassan Nasrallah and other senior leaders of the group.

The benchmark Nikkei 225 Index is down 640.69 or 1.66 percent at 38,011.28, after hitting a low of 37,892.27 earlier. Japanese stocks ended sharply higher on Tuesday.

Market heavyweight SoftBank Group is losing more than 1 percent and Uniqlo operator Fast Retailing is down more than 3 percent. Among automakers, Honda is edging up 0.5 percent, while Toyota is edging down 0.4 percent.

In the tech space, Advantest is declining more than 4 percent, while Tokyo Electron and Screen Holdings are losing almost 3 percent each.

In the banking sector, Sumitomo Mitsui Financial is losing more than 1 percent, while Mitsubishi UFJ Financial is edging up 0.1 percent. Mizuho Financial is flat.

Among the major exporters, Sony is declining almost 5 percent, Panasonic is edging down 0.4 percent and Canon is down almost 1 percent, while Mitsubishi Electric is gaining almost 1 percent.

Among other major losers, Isetan Mitsukoshi, TDK and Murata Manufacturing are slipping almost 5 percent each, while ZOZO and Lasertec are declining more than 4 percent each. NEXON, Disco, Taiyo Yuden and Chugai Pharmaceutical are losing almost 4 percent each, while Socionext, Nitto Denko and Mitsubishi Chemical are sliding more than 3 percent each.

Conversely, Inpex is surging more than 5 percent, Mitsubishi Motors is gaining more than 4 percent and Idemitsu Kosan is adding more than 3 percent, while ENEOS Holdings and Marubeni are up almost 3 percent each.

In economic news, the monetary base in Japan was down 0.1 percent on year in September, the Bank of Japan said on Wednesday – coming in at 669.446 trillion yen. That follows the 0.6 percent gain in August. Banknotes in circulation were down an annual 1.1 percent, while current account balances rose 0.2 percent – including a 3.0 percent jump in reserve balances. For the third quarter of 2024, the monetary base rose 0.5 percent.

In the currency market, the U.S. dollar is trading in the higher 143 yen-range on Wednesday.

On the Wall Street, stocks regained some ground over the course of the trading day on Tuesday but remained firmly negative after moving sharply lower early in the session. The major averages all moved to the downside on the day, with the tech-heavy Nasdaq leading the way lower.

The Nasdaq tumbled 278.81 points or 1.5 percent to 17,910.36, the S&P 500 slumped 53.73 points or 0.9 percent to 5,708.75 and the Dow fell 173.18 points or 0.4 percent to 42,156.97.

Meanwhile, the major European markets turned mixed after seeing early strength. While the U.K.’s FTSE 100 Index rose 0.5 percent, the German DAX Index fell by 0.6 percent and the French CAC 40 Index declined by 0.8 percent.

Crude oil prices moved higher on Tuesday amid the possibility of tight supplies due to an escalation in tensions in the Middle East after Iran launched a missile attack on Israel. West Texas Intermediate Crude oil futures for November closed up $1.66 or nearly 2.5 percent at $69.83 a barrel.

Market Analysis