Japanese Market Lower Amid Pandemic Woes

The Japanese stock market is lower on Friday, returning from Thursday’s public holiday, with the benchmark Nikkei 225 going below the 29,000 mark, as traders remain cautious amid the continuing concerns about the spike in daily domestic coronavirus infections. Traders are also digesting a raft of economic data. However, the cues overnight from Wall Street were positive.

Japan’s nationwide tally of new infections climbed to 5,918 Thursday, the highest since the second state of emergency was completely lifted in late March.

The benchmark Nikkei 225 Index is losing 148.29 points or 0.51 percent to 28,905.68, after hitting a low of 28,894.90 earlier. Japanese market was closed for a holiday on Thursday.

Market heavyweight SoftBank Group is up almost 1 percent, while Fast Retailing is edging down 0.2 percent. Among automakers, Honda is losing almost 1 percent and Toyota is down more than 1 percent.

In the tech space, Advantest, Screen Holdings and Tokyo Electron are losing more than 1 percent each. In the banking sector, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are flat.

The major exporters are mixed. Mitsubishi Electric is gaining more than 2 percent and Canon is edging up 0.4 percent, while Sony is plunging more than 6 percent and Panasonic is losing more than 2 percent.

Among the other major losers, Z Holdings is losing more than 7 percent, Toto is declining more than 6 percent, Tokuyama is down more than 5 percent and Seiko Epson is falling more than 4 percent. Fuji Electric, Isuzu Motors and JTEKT are down more than 3 percent each. Fanuc, Japan Exchange Group, Rakuten, Omron and Suzuki Motor are losing almost 3 percent each.

Conversely, CyberAgent is gaining almost 16 percent, Fujitsu is adding more than 7 percent, Hitachi is up almost 6 percent, DeNA is gaining more than 5 percent and Nippon Express is rising almost 5 percent. Shiseido and Hitachi Construction Machinery are adding more than 4 percent each.

In economic news, overall consumer prices in the Tokyo region of Japan were down a seasonally adjusted 0.4 percent on month in April, the Ministry of Communications and Internal Affairs said on Friday. On a yearly basis, overall inflation tumbled 0.6 percent. Core CPI, which excludes volatile food prices, were also down a seasonally adjusted 0.4 percent on month and fell 0.2 percent on year.

The Ministry also said jobless rate in Japan came in at a seasonally adjusted 2.6 percent in March. That was the lowest since April 2020 and shy of expectations for 2.9 percent, which would have been unchanged from the February reading. The participation rate was steady at 61.9 percent.

Separately, the Ministry of Economy, Trade and Industry said industrial production in Japan was up a seasonally adjusted 2.2 percent on month in March. That beat expectations for a decline of 2.0 percent following the 1.3 percent decline in February. On a yearly basis, industrial production advanced 4.0 percent – again exceeding forecasts for an increase of 1.0 percent following the 2.0 percent contraction in the previous month. Upon the release of the data, the METI upgraded its assessment of industrial production, saying that it is picking up.

Further, the manufacturing sector in Japan continued to improve in April, and at a faster pace, the latest survey from Jibun Bank revealed on Friday with a manufacturing PMI score of 53.6. That’s up from 52.7 in March and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Business confidence regarding activity over the coming 12 months gathered pace in April. Positive sentiment was at its second-highest level since the survey first posed the question in July 2012.

In the currency market, the U.S. dollar is trading in the higher 108 yen-range on Friday.

On Wall Street, stocks showed wild fluctuations over the course of the trading session on Thursday but managed to end the day mostly higher. With the upward move on the day, the S&P 500 ended the session at a new record closing high.

The major averages all closed in positive territory, although the Nasdaq underperformed its counterparts. While the Nasdaq edged up 31.52 points or 0.2 percent to 14,082.55, the Dow climbed 239.98 points or 0.7 percent to 34,060.36 and the S&P 500 advanced 28.29 points or 0.7 percent to 4,211.47.

Meanwhile, the major European markets moved to the downside over the course of the session. While the German DAX Index slumped by 0.9 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.’s FTSE 100 Index closed just below the unchanged line.

Crude oil prices moved higher on Thursday amid optimism about the outlook for energy demand following a drop in U.S. petroleum product supplies. West Texas Intermediate Crude oil futures for June ended up by $1.15 or 1.8 percent at $65.01 a barrel.

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