Japanese Market Significantly Higher

Adding to the gains in the previous two sessions, the Japanese stock market is significantly higher on Friday, following the mixed cues from Wall Street overnight. The benchmark Nikkei 225 is moving well above the 39,900 level, with gains across most sectors led by index heavyweights and technology stocks as traders reacted positively to a slew of domestic economic data.

The benchmark Nikkei 225 Index is gaining 398.19 points or 1.01 percent to 39,966.25, after touching a high of 39,975.44 earlier. Japanese stocks closed significantly higher on Thursday.

Market heavyweight SoftBank Group is gaining more than 1 percent and Uniqlo operator Fast Retailing is adding almost 1 percent. Among automakers, Honda is gaining 1.5 percent and Toyota is adding more than 1 percent.

In the tech space, Advantest is gaining 1.5 percent, Tokyo Electron is adding almost 1 percent and Screen Holdings is advancing almost 2 percent.

In the banking sector, Mitsubishi UFJ Financial is gaining more than 1 percent, Mizuho Financial is adding almost 1 percent and Sumitomo Mitsui Financial is edging up 0.5 percent.

Among major exporters, Mitsubishi Electric and Panasonic are edging up 0.2 to 0.4 percent each, while Sony is gaining more than 1 percent and Canon is adding almost 1 percent.

Among other major gainers, DeNA is soaring almost 11 percent, while Socionext and OKUMA are gaining more than 5 percent each. Nidec, Renesas Electronics and Rakuten Group are adding almost 4 percent each, while Shiseido and Tokyo Tatemono are advancing more than 3 percent each. M3 is up almost 3 percent.

Conversely, there are no other major losers.

In economic news, retail sales in Japan grew 2.8 percent year-on-year in November 2024, up from a downwardly revised 1.3 percent growth in October, beating market expectations of a 1.7 percent growth. On a monthly basis, retail sales rose 1.8 percent in November, the first increase in three months and the highest since September 2021, rebounding from a revised 0.2 percent fall in October.

Unemployment rate in Japan came in at 2.5 percent in November, matching the previous month and market expectations. Meanwhile, the jobs-to-applications ratio was at 1.25 in November, matching the October figure and also in line with estimates.

Meanwhile, the core consumer price index for the Ku-area of Tokyo in Japan increased 2.4 percent year-on-year in December 2024, up from 2.2 percent in the November 2024, reaching its highest level since August and slightly missing market consensus of 2.5 percent.

Industrial production in Japan declined 2.3 percent month-over-month in November 2024, coming in above market estimates for 3.4 percent fall and followed a 2.8 percent growth in the previous month. On a year-over-year basis, industrial production decreased 2.8 percent, reversing from a 1.4 percent increase in October.

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

On Wall Street, stocks regained ground over the course of the trading day on Thursday after moving to the downside early in the session. The major averages climbed well off their early lows and spent much of the day lingering near the unchanged line.

The major averages eventually ended the day narrowly mixed. While the Dow crept up 28.77 points or 0.1 percent to 43,325.80, the Nasdaq slipped 10.77 points or 0.1 percent to 20,020.37 and the S&P 500 edged down 2.45 points or less than a tenth of a percent to 6,037.59.

Meanwhile, the major European markets all remained closed on the day in observance of Boxing Day.

Crude oil prices failed to hold early gains and settled lower on Thursday amid uncertainty about the outlook for global oil demand, and likely excess supply in the market. West Texas Intermediate Crude oil futures for February settled lower by $0.48 or nearly 0.7 percent at $69.62 a barrel.

Market Analysis