News Column

Japanese Market Trades Weak

August 28, 2014

TOKYO (dpa-AFX) - The Japanese stock market is trading lower on Friday, as investors reacted to worries over the escalating tensions in Ukraine as well as a mixed bag of local economic data.

In late-morning trades, the benchmark Nikkei 225 Index is down 82.29 points or 0.53 percent to 15,377.57, after opening lower at 15423.88.

In the banking space, Mitsubishi UFJ Financial (MTU) is adding 0.17 percent and Sumitomo Mitsui Financial is gaining almost 1 percent, while Mizuho Financial (MFG) is edging down 0.1 percent.

Among automakers, Honda Motor (HMC) is up 0.2 percent and Toyota Motor (TM) is up 0.4 percent, while Nissan Motor is down 0.9 percent.

Softbank is gaining almost 2 percent following strong earnings results at China'sAlibaba Group, in which Softbank owns a large stake.

Among the other gainers, Sumitomo Heavy Industries is up 0.2 percent and Nitto Denko is adding 0.18 percent. Sony is up 0.6 percent, Hitachi is adding 0.6 percent and Mitsubishi Heavy Industries is up 0.06 percent.

Meanwhile, Pioneer Corp. is losing more than 3 percent, Nisshin Steel is down 2.3 percent and Tokuyama Corp is declining 1.2 percent. Panasonic is losing 0.3 percent.

On the economic front, Industrial production in Japan added 0.2 percent on month in July, the Ministry of Economy, Trade and Industry said on Friday. That was well shy of forecasts for a gain of 1.0 percent following the 3.4 percent decline in June.

On a yearly basis, industrial production fell 0.9 percent - also missing expectations for a fall of 0.1 percent following the 3.1 percent jump in the previous month.

The unemployment rate in Japan was a seasonally adjusted 3.8 percent in July, the Ministry of Internal Affairs and Communications said. That missed expectations for 3.7 percent, which would have been unchanged from the June reading.

Retail sales in Japan were up 0.5 percent on year in July, the Ministry of Economy, Trade and Industry said on Friday - worth 11.812 trillion yen. That beat forecasts for a decline of 0.2 percent following the 0.6 percent contraction in June.

On a seasonally adjusted monthly basis, retail sales dipped 0.5 percent missing forecasts for an increase of 0.3 percent after gaining 0.5 percent in June.

The average of household spending in Japan was down 5.9 percent on year in July, the Ministry of Internal Affairs and Communications said - standing at 280,293 yen. That missed forecasts for a decline of 2.9 percent following the 3.0 percent contraction in June.

Core consumer prices in Japan were up 3.3 percent on year in July, the Ministry of Internal Affairs and Communications said - matching forecasts and unchanged from June.

Inflation for Tokyo, considered a leading indicator for the nationwide trend, was up 2.8 percent on year in August - unchanged and exceeding forecasts for 2.7 percent.

In the currency market, the U.S. dollar traded in the upper 103 yen range on Friday. In early trades, the dollar was quoted in a range of 103.71-103.75 yen, down from 103.75-103.77 yen in Tokyo on Thursday.

On Wall Street, U.S. stocks finished lower on Thursday, with the S&P 500 snapping a three-session win streak to end below 2,000. Stocks wobbled throughout the session amid heightened expectations that the Federal Reserve may hike rates sooner than forecast. Geopolitical tensions and economic weakness in Europe also had investors on edge.

The Dow Jones Industrial Average closed down 42.44 points, or 0.3 percent, at 17,079.57. The S&P 500 lost 3.38 points, or 0.2 percent, at 1,996.74, falling from record highs above 2,000 thanks to weakness in the financial sector. The Nasdaq declined 11.93 points, or 0.3 percent, to 4,557.69.

European stocks fell Thursday, trimming recent gains after the latest in a string of downbeat reports on Germany's economy. The German DAX lost 1.27 percent and the French CAC 40 dropped 0.7 percent. The UK'sFTSE 100 eased 0.37 percent.

U.S. crude oil ended higher for a third straight session Thursday, amid supply concerns and worries over developments in Ukraine, even as crude stockpiles in the U.S. declined more than expected last week.

Crude Oil futures for October delivery, the most actively traded contract, gained $0.67 or 0.7 percent to close at $94.55 a barrel on the New York Mercantile Exchange Thursday.

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Source: dpa-AFX International Compact

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