Japanese Market Tumbles 2.6%

The Japanese stock market is sharply lower on Wednesday, snapping the four-session winning streak, with the Nikkei 225 staying just above the 26,200 mark, following the broadly negative cues overnight from Wall Street, amid continued concerns about economic slowdown, persistently rising inflation and rising prospects of sharper interest rate hikes. Some traders also booked profits after the recent surge in the markets.

The benchmark Nikkei 225 Index is down 706.38 points or 2.62 percent at 26,204.82, after hitting a low of 26,150.09 earlier. Japanese stocks closed significantly higher on Wednesday.

Market heavyweight SoftBank Group is losing more than 2 percent and Uniqlo operator Fast Retailing is declining almost 3 percent. Among automakers, Honda is losing more than 2 percent and Toyota is slipping almost 3 percent.

In the tech space, Screen Holdings and Advantest are losing almost 3 percent each, while Tokyo Electron is declining 3.5 percent.

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

Among the major exporters, Sony is losing almost 3 percent, Panasonic is declining more than 3 percent, Canon is down almost 1 percent and Mitsubishi Electric is slipping almost 2 percent.

Among the other major losers, NTT Data, Murata Manufacturing, Yamato Holdings and Idemitsu Kosan are losing more than 4 percent each, while Minebea Mitsumi, Nissan Motor, Rakuten Group, Toppan, Nippon Yusen K.K., Marui Group, T&D Holdings, Recruit Holdings, Keio, Sumitomo Pharma and Sumitomo Realty & Development are all declining almost 4 percent each.

Conversely, there are no major gainers.

In economic news, Japan posted a merchandise trade deficit of 839.2 billion yen in April, the Ministry of Finance said on Thursday. That beat expectations for a shortfall of 1,150 billion yen following the downwardly revised 414.1 billion yen deficit in March (originally a 412.4 billion yen deficit). Exports were up 12.5 percent on year to 8.076 trillion yen, shy of forecasts for an increase of 13.8 percent and slowing from 14.7 percent in the previous month. Imports jumped an annual 28.2 percent, missing expectations for a gain of 35.0 percent and down from 31.2 percent a month earlier.

Meanwhile, the value of core machine orders in Japan was up 7.6 percent on year in March, the Cabinet Office said on Thursday – coming in at 869.5 billion yen. That beat forecasts for an increase of 3.7 percent and was up from 4.3 percent in February. On a seasonally adjusted monthly basis, core machine orders climbed 7.1 percent – also exceeding expectations for 3.7 percent following the 9.8 percent contraction in the previous month.

For the first quarter of 2022, core machine orders fell 3.6 percent on quarter and gained 6.1 percent on year after advancing 5.1 percent on quarter and 6.4 percent on year in the three months prior. For the second quarter of 2022, core machine orders are seen lower by 8.1 percent on quarter and 5.6 percent on year.

In the currency market, the U.S. dollar is trading in the mid-128 yen-range on Wednesday.

On Wall Street, stocks showed a substantial move back to the downside during trading on Wednesday after showing a strong upward move in the previous session. With the steep drop on the day, the Dow and the S&P 500 ended the session at their lowest closing levels in over a year.

The major averages saw continued weakness late in the session, ending the day near their worst levels. The Dow plunged 1,164.52 points or 3.6 percent to 31,490.07, the Nasdaq plummeted 566.37 points or 4.7 percent to 11,418.15 and the S&P 500 tumbled 165.17 points or 4 percent to 3,923.68.

The major European markets all also moved to the downside on the day. While the German DAX Index tumbled by 1.3 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index slumped by 1.2 percent and 1.1 percent, respectively.

Crude oil futures settled lower on Wednesday despite data showing a drop in crude inventories last week. A stronger dollar amid rising prospects of sharper interest rate hikes by the Federal Reserve also contributed to the decline. West Texas Intermediate Crude oil futures for June ended lower by $2.81 or about 2.5% at $109.59 a barrel.

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