Japanese Market Significantly Lower

Giving up some of the gains in the previous three sessions, the Japanese market is significantly lower on Thursday, despite the broadly positive cues from Wall Street overnight. The Nikkei 225 is falling well below the 39,300 level, with weakness across most sectors led by index heavyweights and technology stocks. Traders react to the sharp depreciation in the yen that has now tumbled to a 38-year low.

The benchmark Nikkei 225 Index is down 410.53 points or 1.03 percent to 39,256.54, after hitting a low of 39,193.51 earlier. Japanese shares ended sharply higher on Wednesday.

Market heavyweight SoftBank Group is edging down 0.4 percent and Uniqlo operator Fast Retailing is declining more than 2 percent. Among automakers, Toyota is losing almost 1 percent and Honda is also down almost 1 percent.

In the tech space, Advantest is edging up 0.1 percent, while Tokyo Electron is losing almost 2 percent and Screen Holdings is declining almost 4 percent.

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

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

Among other major losers, Daiichi Sankyo losing more than 3 percent, while Sharp, Japan Exchange Group and Daikin Industries are down almost 3 percent each.

Conversely, there are no other major gainers.

In economic news, the total value of retail sales in Japan was up 3.0 percent on year in May, the Ministry of Economy, Trade and Industry said on Thursday – coming in at 13.504 trillion yen. That exceeded expectations for an increase of 2.0 percent, which would have been unchanged from the April reading following a downward revision from 2.4 percent. On a monthly basis, retail sales jumped a seasonally adjusted 1.7 percent after rising 0.8 percent in the previous month.

In the currency market, the U.S. dollar is trading in the higher 160 yen-range on Thursday.

On Wall Street, stocks closed slightly higher on Wednesday after a somewhat sluggish session as investors made cautious moves while awaiting the release of personal consumption expenditures price index report, due on Friday. Data on first quarter GDP, durable goods orders for the month of May, and jobless claims report are also due this week.

The major averages all closed on the positive side. Technology stocks outperformed, lifting the Nasdaq by 87.50 points or 0.49 percent, to 17,805.16. The Dow ended up by 15.64 points or 0.04 percent at 39,127.80, while the S&P 500 settled at 5,477.60, gaining 8.60 points or 0.16 percent.

Meanwhile, tthe major European markets all moved to the downside on the day. The U.K.’s FTSE 100 settled lower by 0.27 percent, Germany’s DAX edged down 0.12 percent, and France’s CAC 40 closed down by 0.69 percent.

Crude oil prices fell on Wednesday after data showed a notable increase in crude inventories in the U.S. last week but recovered and eventually ended the day’s session slightly higher. West Texas Intermediate Crude oil futures for August rose $0.07 at $80.90 a barrel.

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