Japanese Market Significantly Lower

The Japanese stock market is significantly lower on Friday, extending the losses in the previous session, with the benchmark Nikkei 225 falling below the 32,700 level, following the mixed cues from global markets overnight, as traders reacted to domestic data that showed a lower than expected expansion in second-quarter GDP. Weakness was seen across most sectors, led by exporters and technology stocks.

The benchmark Nikkei 225 Index is losing 340.39 points or 1.03 percent to 32,650.69, after hitting a low of 32,535.58 earlier. Japanese stocks closed significantly lower on Thursday.

Market heavyweight SoftBank Group is flat and Uniqlo operator Fast Retailing is losing more than 1 percent. Among automakers, Honda is gaining almost 2 percent, while Toyota is edging down 0.5 percent.

In the tech space, Advantest is gaining more than 1 percent, while Screen Holdings is losing almost 2 percent and Tokyo Electron is declining more than 4 percent.

In the banking sector, Mitsubishi UFJ Financial and Mizuho Financial are edging down 0.1 percent each, while Sumitomo Mitsui Financial is edging up 0.1 percent.

Among major exporters, Sony is losing 1.5 percent and Panasonic is declining more than 1 percent, while Canon and Mitsubishi Electric are edging down 0.5 percent each.

Among other major losers, CyberAgent is surging more than 5 percent and Mitsui E&S is gaining more than 3 percent, while Dentsu Group and Nippon Sheet Glass are adding almost 3 percent each.

Conversely, there are no other major gainers.

In economic news, Japan’s gross domestic product expanded a seasonally adjusted 1.2 percent on quarter in the second quarter of 2023, the Cabinet Office said on Friday. That was shy of expectations for an increase of 1.5 percent but was up from 0.7 percent on the previous three months. On an annualized basis, GDP advanced 4.8 percent – again missing forecasts for 6.0 percent but up from 2.7 percent in the three months prior.

The Ministry of Finance said Japan posted a current account surplus of 2.772 trillion yen in July. That exceeded expectations for a surplus of 2.295 trillion yen and was up from the 1.509 trillion yen surplus in June.

Exports dipped 0.6 percent on year to 8.556 trillion yen, while imports slumped an annual 13.3 percent to 8.488 trillion yen for a trade surplus of 682 billion yen. The capital account showed a deficit of 65.3 billion yen, while the financial account posted a surplus of 2.295 trillion yen.

Meanwhile, the Bank of Japan said the value of overall bank lending in Japan was up 3.1 percent on year in August, coming in at 606.012 trillion yen. That beat forecasts for an increase of 2.8 percent and was up from 2.9 percent in July.

In the currency market, the U.S. dollar is trading in the lower 147 yen-range on Friday.

On Wall Street, stocks came under pressure in early trading on Thursday but regained some ground over the course of the session. The major averages all climbed well off their lows of the session, although the tech-heavy Nasdaq continued to post a notable loss.

The Nasdaq slumped 123.64 points or 0.9 percent to 13,748.83 and the S&P 500 fell 14.34 points or 0.3 percent to 4,451.14. Meanwhile, the narrower Dow climbed into positive territory and ended the day up 57.54 points or 0.2 percent at 34,500.73.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index closed just above the unchanged line and the U.K.’s FTSE 100 Index rose by 0.2 percent.

Crude oil prices fell on Thursday, despite a drop in U.S. crude inventories last week. Profit taking after recent strong gains was largely responsible as West Texas Intermediate Crude oil futures for October ended lower by $0.67 or 0.9 percent at $86.87 a barrel.

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