Japanese Market Sharply Lower

(RTTNews) - The Japanese stock market is sharply lower on Thursday, extending the steep losses in the previous session, with the Nikkei 225 falling below the 31,400 level, following the broadly negative cues from Wall Street overnight, with weakness across sectors, led by index heavyweights and exporter stocks, after domestic data showed exports declined for the first time in 29 months, while imports dropped the most in nearly three years.

The benchmark Nikkei 225 Index is down 406.23 points or 1.28 percent to 31,360.59, after hitting a low of 31,309.68 earlier. Japanese stocks closed sharply lower on Wednesday.

Market heavyweight SoftBank Group is losing almost 2 percent and Uniqlo operator Fast Retailing is declining 2.5 percent. Among automakers, Toyota is losing more than 1 percent and Honda is slipping almost 1 percent.

In the tech space, Screen Holdings is edging up 0.1 percent and Advantest is edging up 0.4 percent, while Tokyo Electron is edging down 0.3 percent.

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

Among the major exporters, Canon is losing more than 1 percent, Mitsubishi Electric is down 1.5 percent, Panasonic is declining more than 2 percent and Sony is declining almost 1 percent.

Among other major losers, CyberAgent is losing almost 5 percent, while Rakuten Group, Dowa Holdings and Nidec are down more than 4 percent each. Hoya, Nippon Paper Industries, Teijin and Kobe Steel are declining almost 4 percent each, while Mitsui & Co., Trend Micro, Marubeni, M3, Mitsui E&S, Mitsubishi Heavy Industries and Sumitomo Osaka Cement are declining more than 3 percent each.

Conversely, there are no other major gainers.

In economic news, the value of core machine orders in Japan was up a seasonally adjusted 2.7 percent on month in June, the Cabinet Office said on Thursday - coming in at 854.0 billion yen. That missed forecasts for an increase of 4.6 percent following the 7.6 percent decline in May.

On a yearly basis, core machine orders shed 5.8 percent - again shy of expectations for a fall of 5.5 percent after sinking 8.7 percent in the previous month. The total value of machinery orders received by 280 manufacturers operating in Japan increased 0.2 percent on month and fell 8.6 percent on year to 2,643.4 billion yen.

For the second quarter of 2023, orders were down 3.2 percent on quarter and 6.7 percent on year at 2,585.5 billion yen. For the third quarter, orders are forecast to fall 2.6 percent on quarter and 7.9 percent on year to 2,517.4 billion yen.

Japan also posted a merchandise trade deficit of 78.731 billion yen in July, the Ministry of Finance said on Thursday. That was well shy of estimates for a surplus of 24.6 billion yen following the upwardly revised 43.1 billion yen surplus in June (originally 43.0 billion).

Exports were down 0.3 percent on year to 8.724 trillion yen, beating forecasts for a drop of 0.8 percent following the 1.5 percent increase in the previous month. Imports slumped an annual 13.5 percent versus expectations for a fall of 14.7 percent after dropping 12.9 percent a month earlier.

In the currency market, the U.S. dollar is trading in the lower 146 yen-range on Thursday.

On Wall Street, stocks closed lower on Wednesday, extending losses from the previous session, amid indications the Federal Reserve will continue to hold interest rates higher for longer to contain inflation. Prospects of a possible downgrade of several U.S. lenders by Fitch Ratings weighed as well.

The major averages all ended firmly down in negative territory, with the Nasdaq suffering a sharper loss. The Dow ended with a loss of 180.65 points or 0.52 percent at 34,765.74, the S&P 500 shed 33.53 points or 0.76 percent, as it settled at 4,404.33 and the Nasdaq dropped 156.42 points or 1.15 percent to 13,474.63.

Meanwhile, the major European markets ended mixed on Wednesday. The U.K.'s FTSE 100 ended down 0.44 percent, and France's CAC 40 shed 0.1 percent, while Germany's DAX crept up 0.14 percent.

Crude oil prices slipped Wednesday amid worries about the outlook for energy demand from China and uncertainty over interest rates. West Texas Intermediate Crude oil futures for September shed $1.61 or 2 percent at $79.38 a barrel.