Japanese Market Significantly Lower

The Japanese stock market is significantly lower on Wednesday, giving up some of the gains in the previous two sessions, following the mixed cues from Wall Street overnight. The Nikkei 225 is falling well below the 38,200 level, with weakness index heavyweights, exporters and technology stocks partially offset by gains in financial stocks.

The benchmark Nikkei 225 Index is down 374.79 or 0.97 percent at 38,151.16, after hitting a low of 37,954.38 earlier. Japanese stocks ended modestly higher on Tuesday.

Market heavyweight SoftBank Group is losing almost 4 percent and Uniqlo operator Fast Retailing is edging down 0.3 percent. Among automakers, Honda is losing almost 1 percent and Toyota is down more than 2 percent.

In the tech space, Advantest is edging down 0.1 percent, while Screen Holdings and Tokyo Electron are losing more than 1 percent each.

In the banking sector, Mizuho Financial is gaining almost 3 percent, while Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are adding more than 2 percent each.

Among the major exporters, Sony is losing almost 2 percent, Mitsubishi Electric is declining more than 1 percent and Canon is edging down 0.1 percent, while Panasonic is gaining more than 1 percent.

Among other major losers, Oriental Land is plunging almost 10 percent, Murata Manufacturing is losing almost 5 percent and ANA Holdings is down more than 3 percent, while Kao, Mitsubishi Motors, Mercari, Eisai, Keisei Electric Railway and Shiseido are declining almost 3 percent each.

Conversely, TDK is gaining more than 3 percent, while Japan Post and Resona are adding almost 3 percent each.

In economic news, the Bank of Japan will wrap up its monetary policy meeting on Wednesday and then announce its decision on interest rates. The BoJ is widely expected to keep its benchmark lending rate unchanged at 0.10 percent.

The value of retail sales in Japan was up a seasonally adjusted 3.7 percent on month in June, the Ministry of Economy, Trade and Industry or METI said on Wednesday – coming in at 13.678 trillion yen. That beat expectations for an increase of 3.3 percent following the 2.8 percent gain in May. On a monthly basis, retail sales rose 0.6 percent. For the second quarter of 2024, retail sales gained 1.8 percent on quarter and 2.8 percent on year at 40.632 trillion yen.

The METI also said industrial output in Japan dropped a seasonally adjusted 3.6 percent on month in June, the Ministry of Economy, Trade and Industry said on Wednesday. That exceeded expectations for a decline of 4.2 percent following the 3.6 percent increase in May. On a yearly basis, industrial output slumped 7.3 percent after rising 1.1 percent in the previous month. Upon the release of the data, the METI downgraded its assessment of industrial production, saying that it fluctuates indecisively but has weakened.

In the currency market, the U.S. dollar is trading in the lower 152 yen-range on Wednesday.

On the Wall Street, stock indexes moved in more starkly opposite directions during trading on Tuesday after ending yesterday’s choppy trading session narrowly mixed. While the tech-heavy Nasdaq moved sharply lower, the Dow ended the day firmly positive.

The Nasdaq tumbled 222.78 points or 1.3 percent to 17,147.41, ending the session at its lowest closing level in well over a month. The S&P 500 also fell 27.10 points or 0.5 percent to 5,436.44, while the narrower Dow climbed 203.40 points or 0.5 percent to 40,743.33.

The major European markets also turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index dipped by 0.2 percent, the French CAC 40 Index and the German DAX Index climbed by 0.4 percent and 0.5 percent, respectively.

Crude oil prices fell Tuesday amid continued concerns about the outlook for demand, and ahead of the Federal Reserve’s monetary policy announcement and weekly inventory data later today. West Texas Intermediate crude oil futures for September ended down $1.08 or 1.42 percent at $74.73 a barrel.

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