Japanese Market Modestly Higher

(RTTNews) – The Japanese stock market is modestly higher after paring early losses in choppy trading on Tuesday, extending the gains of the previous two sessions, with the benchmark Nikkei index staying above the 29,000 mark, following the mixed cues from Wall Street overnight. Traders are digesting better than expected local data, while also remaining concerned after the extension of the COVID-19 state of emergency in several major areas until June 20.

The benchmark Nikkei 225 Index is gaining 44.32 points or 0.15 percent to 29,063.56, after touching a high of 29,140.68 and a low of 28,140.68 earlier. Japanese shares closed modestly higher on Monday.

Market heavyweight SoftBank Group is losing more than 1 percent and Uniqlo operator Fast Retailing is flat. Among automakers, Honda is gaining almost 1 percent, while Toyota is edging down 0.4 percent and Mazda is down almost 1 percent.

In the tech space, Advantest and Tokyo Electron are flat, while Screen Holdings is up almost 2 percent. In the banking sector, Mizuho Financial is flat, while Mitsubishi UFJ Financial is gaining almost 1 percent and Sumitomo Mitsui Financial is edging up 0.3 percent.

The major exporters are mixed, with Sony gaining almost 1 percent and Canon edging up 0.3 percent, while Panasonic is edging down 0.4 percent and Mitsubishi Electric is losing almost 1 percent.

Among the other major gainers, Daiichi Sankyo is gaining almost 5 percent, while Trend Micro, Sumitomo Dainippon Pharma and Kawasaki Kisen Kaisha are adding more than 4 percent each. Tokyu Fudosan and Sapporo Holdings are up more than 3 percent each, while Z Holdings, Kirin Holdings, Kansai Electric Power, Isuzu Motors, Yamaha Motor, Nippon Suisan Kaisha and Rakuten Group are all higher by more than 2 percent each.

Conversely, Sumitomo Metal Mining is losing more than 3 percent, while Daikin Industries is down almost 3 percent and Ebara is declining more than 2 percent. Oji Holdings, Taisei, Dai-ichi Life Holdings, Toho Zinc and Kajima are all lower by almost 2 percent each.

In economic news, Japan’s gross domestic product contracted an annualized 3.9 percent on year in the first quarter of 2021, the Cabinet Office said in Tuesday’s final reading. That exceeded expectations for a decline of 4.8 percent following the 11.7 percent surge in the three months prior. On a quarterly basis, GDP was down 1.0 percent – again beating forecasts for a decline of 1.2 percent following the 2.8 percent increase in the previous three months. Capital expenditure was down 1.2 percent on quarter, matching expectations following the 4.3 percent gain in the previous quarter.

Separately, the Ministry of Finance said that Japan posted a current account surplus of 1,321.8 billion yen in April. That missed expectations for a surplus of 1,500.6 billion yen following the 2,650.1 billion yen surplus in March. Exports were up 38.0 percent on year at 6,825.5 billion yen and imports gained an annual 11.3 percent at 6,536.0 billion yen for a trade surplus of 289.5 billion yen. The capital account showed a surplus of 3.4 billion yen, while the financial account saw a shortfall of 242.7 billion yen.

The Bank of Japan also said that overall bank lending in Japan was up 2.9 percent on year in May, standing at 578.366 trillion yen. That follows the 4.8 percent increase in April. Excluding trusts, bank lending gained an annual 2.2 percent to 501.954 trillion yen, slowing from the 4.3 percent expansion in the previous month. Lending from trusts climbed 7.5 percent on year to 76.411 trillion yen after rising 8.3 percent a month earlier. Lending from foreign banks rose 2.5 percent on year to 3.381 trillion yen, up from 1.2 percent in April.

In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Tuesday.

On the Wall Street, stocks showed a lack of direction over the course of the trading session on Monday before eventually ending the session mixed. The lackluster performance came on the heels of the advance seen last week.

While the tech-heavy Nasdaq climbed 67.23 points or 0.5 percent to 13,881.72, the Dow fell 126.15 points or 0.4 percent to 34,630.24 and the S&P 500 edged down 3.37 points or 0.1 percent to 4,226.52.

The major European markets also ended the day mixed. While the German DAX Index edged down 0.1 percent, the U.K.’s FTSE 100 Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.4 percent.

Crude oil prices drifted lower Monday, coming off 30-month highs after data showed a drop in China’s crude oil imports in April. West Texas Intermediate Crude oil futures for July ended down by $0.39 or 0.6 percent at $69.23 a barrel.