Japanese Market Significantly Lower

The Japanese stock market is trading significantly lower on Monday, snapping the four-session winning streak. The benchmark Nikkei 225 is falling below the 40,600 level, following the mixed cues from global markets on Friday, with weakness across most sectors led by exporters and financial stocks.

The benchmark Nikkei 225 Index is down 299.57 or 0.73 percent at 40,588.86, after touching a high of 40,837.18 earlier. Japanese shares ended modestly higher on Friday.

Market heavyweight SoftBank Group is edging up 0.1 percent, while Uniqlo operator Fast Retailing is edging down 0.3 percent. Among automakers, Honda is losing more than 1 percent and Toyota is down almost 1 percent.

In the tech space, Screen Holdings is edging down 0.5 percent and Tokyo Electron is losing almost 1 percent, while Advantest is advancing more than 3 percent.

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

The major exporters are higher. Canon and Mitsubishi Electric are losing almost 1 percent each, while Panasonic is declining almost 2 percent and Sony is slipping more than 2 percent.

Among other major losers, Sharp is losing almost 4 percent, while Fujitsu, Olympus, Secom and NEXON are declining more than 3 percent each. Mitsui Fudosan, Sumitomo Realty & Development, DeNA and Hoya are down almost 3 percent each.

Conversely, Japan Steel Works is gaining almost 4 percent and Fujikura is adding almost 3 percent.

In economic news, members of the Bank of Japan’s Monetary Policy Board said that Japan’s economy is trending upward and should continue to do so in the short term, minutes from the central bank’s January 22 monetary policy meeting revealed on Monday.

At the meeting, the central bank left its massive monetary stimulus unchanged at -0.1 percent and downgraded its inflation outlook for the next fiscal year. The bank will also 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.

Overall inflation is likely to be above 2 percent through fiscal 2024, although it may slow down in fiscal 2025, the members said – although they vowed to continue with easing as long as necessary to reach price stability.

In the Outlook for Economic Activity and Prices, the central bank said consumer prices will remain above 2 percent through the fiscal 2024. The bank lowered its fiscal 2024 core inflation outlook to 2.4 percent from 2.8 percent and the projection for the fiscal 2025 was lifted to 1.8 percent from 1.7 percent.

The real economic growth forecast for the fiscal 2024 was lifted to 1.2 percent from 1.0 percent and the estimate for the fiscal 2025 was retained at 1.0 percent.

In the currency market, the U.S. dollar is trading in the lower 151 yen-range on Monday.

On Wall Street, stocks turned in a relatively lackluster performance during trading on Friday after trending higher over the past several sessions. The major averages fluctuated over the course of the session before eventually ending the day mixed.

While the Nasdaq inched up 26.98 points or 0.2 percent to a new record closing high of 16,428.82, the S&P 500 edged down 7.35 points or 0.1 percent to 5,234.18 and the Dow slid 305.47 points or 0.8 percent to 39,475.90.

The major European markets also finished the day mixed. While the French CAC 40 Index fell by 0.3percent, the German DAX Index inched up by 0.2 percent and the U.K.’s FTSE 100 Index climbed by 0.6 percent.

Crude oil prices fell on Friday, as the dollar rose sharply with the Federal Reserve set to hold interest rates higher for now. West Texas Intermediate Crude oil futures for May ended lower by $0.44 at $80.63 a barrel.

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