Japanese Market Notably Higher

The Japanese stock market is notably higher on Wednesday, snapping a losing streak of five sessions, with the benchmark Nikkei index just below the 27,600 level, following the broadly positive cues overnight from Wall Street. Traders are indulging in bargain hunting following the recent losses, even as they remain concerned amid the recent acceleration in the new wave of coronavirus cases, particularly in Olympic city Tokyo.

Japanese markets will be closed on Thursday and Friday for public holidays, with the Tokyo 2020 opening ceremony on Friday.

The benchmark Nikkei 225 Index is gaining 210.48 points or 0.77 percent to 27,598.64, after hitting a low of 27,882.43 earlier. Japanese stocks closed significantly lower on Tuesday.

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

In the tech space, Screen Holdings, Tokyo Electron and Advantest are gaining more than 1 percent each.

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

Among the major exporters, Panasonic is gaining more than 3 percent, while Mitsubishi Electric and Sony are adding more than 2 percent each. Canon is losing almost 3 percent.

Among the other major gainers, Mitsubishi Motors, Casio Computer, NSK and Nippon Electric Glass are gain almost 4 percent each, while Sumitomo Heavy Industries, Toyota Tsusho, Dai Nippon Printing, Isuzu Motors, NEC, Nippon Yusen K.K., Minebea Mitsumi, Marubeni, Hino Motors, Mitsui O.S.K. Lines and Japan Steel Works are all adding more than 3 percent each.

Conversely, Kyowa Kirin is losing almost 2 percent.

In economic news, Members of the Bank of Japan’s monetary policy meeting said that the country’s economy has shown some improvement in the aftermath of the Covid-19 pandemic but still remains in severe condition, minutes from the central bank’s meeting on June 17 and 18 revealed on Wednesday.

At the meeting, the central bank voted to keep its benchmark lending rate steady at -0.1 percent. The bank also will continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent. Inflation is expected to hover right around 0 percent in the near term, the bank said, although it’s expected to eventually start picking up again.

Additionally, Japan posted a merchandise trade surplus of 383.2 billion yen in June, the Ministry of Finance said on Wednesday. That was shy of expectations for a surplus of 460 billion yen following the downwardly revised 189.4 billion yen deficit in May (originally a 187.1 billion yen deficit). Imports jumped 32.7 percent on year to 6.837 trillion yen – exceeding expectations for a gain of 29 percent after climbing 27.9 percent in the previous month. Exports surged an annual 48.6 percent, beating forecasts for a gain of 46.2 percent after rising 49.6 percent a month earlier.

In the currency market, the U.S. dollar is trading in the higher 109 yen-range on Wednesday.

On Wall Street, stocks moved sharply higher over the course of the trading day on Tuesday, regaining ground following the sell-off seen in the previous session. The major averages all showed strong moves back to the upside but remain well off their record highs.

The major averages pulled back off their best levels going into the close but held on to strong gains. The Dow spiked 549.95 points or 1.6 percent to 34,511.99, the Nasdaq surged up 223.89 points or 1.6 percent to 14,498.88 and the S&P 500 jumped 64.57 points or 1.5 percent to 4,323.06.

The major European markets also rebounded after ending the previous session sharply lower. While the French CAC 40 Index advanced by 0.8 percent, the German DAX Index and the U.K.’s FTSE Index climbed by 0.6 percent and 0.5 percent, respectively.

Crude oil futures rebounded on bargain hunting on Tuesday, even amid concerns about the outlook for energy demand and possible oversupply in the market. West Texas Intermediate Crude oil futures for September, the new front month contract, ended up $0.85 or 1.3 percent at $67.20 a barrel.

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