Japanese Market Notably Lower

Adding to the losses in the previous session, the Japanese market is notably lower on Thursday after opening in the green, despite the broadly positive cues from Wall Street overnight. The Nikkei 225 is falling below the 39,000 mark, with weakness in exporters and technology stocks partially offset by gains in automakers and financial stocks.

Traders also reacted to domestic data that showed Japan posting a trade deficit in September as exports unexpectedly declined, while imports growth slowed.

The benchmark Nikkei 225 Index is down 186.02 points or 0.47 percent to 38,994.28, after touching a high of 39,299.74 and a low of 38,932.69 earlier. Japanese shares ended sharply lower on Wednesday.

Market heavyweight SoftBank Group is edging down 0.4 percent, while Uniqlo operator Fast Retailing is edging up 0.3 percent. Among automakers, Toyota is gaining almost 2 percent and Honda is adding almost 1 percent.

In the tech space, Tokyo Electron is losing more than 2 percent, Advantest is declining almost 3 percent and Screen Holdings is down almost 1 percent.

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

Among the major exporters, Sony and Canon are edging down 0.1 to 0.2 percent each, while Mitsubishi Electric is losing almost 1 percent each. Panasonic is advancing almost 1 percent.

Among other major losers, Fujikura is losing almost 5 percent and ZOZO is down more than 3 percent, while BANDAI NAMCO and Hoya are declining almost 3 percent each.

Conversely, Chubu Electric Power is surging more than 4 percent, while Tokyo Electric Power and Kansai Electric Power are gaining almost 4 percent each. Toho is adding more than 3 percent and Subaru is advancing almost 3 percent.

In economic news, Japan posted a merchandise trade deficit of 294.3 billion yen in September, the Ministry of Finance said on Thursday. That missed forecasts for a shortfall of 237.6 billion yen following the downwardly revised 703.2 billion yen deficit in August (originally -695.3 billion yen).

Exports fell 1.7 percent on year to 9.038 trillion yen – shy of expectations for an increase of 0.5 percent following the downwardly revised 5.5 percent increase in the previous month (originally 5.6 percent). Imports rose an annual 2.1 percent to 9.332 trillion yen versus expectations for a gain of 3.2 percent following the 2.3 percent increase a month earlier.

In the currency market, the U.S. dollar is trading in the lower 149 yen-range on Thursday.

On Wall Street, stocks showed a lack of direction early in the session on Wednesday but moved mostly higher over the course of the trading day. With the upward move, the Dow more than offset the loss posted during Tuesday’s session, reaching a new record closing high.

The major averages bounced back and forth across the unchanged line in early trading but climbed more firmly into positive territory as the day progressed. The Dow jumped 337.28 points or 0.8 percent to 43,077.70, the Nasdaq rose 51.49 points or 0.3 percent to 18,367.08 and the S&P 500 climbed 27.21 points or 0.5 percent to 5,842.47.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index jumped by 1.0 percent, the German DAX Index slipped by 0.3 percent and the French CAC 40 Index fell by 0.4 percent.

Crude oil prices settled lower on Wednesday, weighed down by concerns about weak demand from China and easing geopolitical worries. West Texas Intermediate Crude oil futures for November ended down $0.19 at $70.39 a barrel.

Market Analysis