On Monday, the Japanese stock market broke its four-day winning streak and traded significantly lower. This downward trend follows mixed global cues from Friday, with a noticeable decline across most sectors, primarily exporters and financial stocks.
The Nikkei 225, Japan's primary stock market index, dropped by 299.57 points, or 0.73%, settling at 40,588.86 after peaking at 40,837.18 earlier. The market landscape was a contrast to Friday when Japanese shares closed higher.
Market heavyweight SoftBank Group experienced a slight increase of 0.1%, while Fast Retailing, the company behind Uniqlo, edged down by 0.3%. In the automotive industry, both Honda and Toyota experienced losses of more than 1%.
Tech firms also saw fluctuations, with Screen Holdings slightly decreasing by 0.5% and Tokyo Electron losing almost 1%. Advantest, however, saw growth, advancing more than 3%.
The banking sector also faced losses with Sumitomo Mitsui Financial and Mizuho Financial dipping more than 1%, and Mitsubishi UFJ Financial losing just under 1%. Export industries showed signs of resilience with Canon and Mitsubishi Electric each decreasing by close to 1%, Panasonic declining nearly 2%, and Sony slipping more than 2%.
Other major losers included Sharp, which lost almost 4%, and Fujitsu, Olympus, Secom, and NEXON, which each declined by more than 3%. Similarly, Mitsui Fudosan, Sumitomo Realty & Development, DeNA, and Hoya experienced almost 3% in losses each.
On the other hand, Japan Steel Works climbed almost 4% and Fujikura increased by nearly 3%.
Economic reports from the Bank of Japan’s Monetary Policy Board have suggested that Japan's economy is on an upward trend, a pattern expected to persist in the short term. The central bank maintained its substantial monetary stimulus unchanged at -0.1% and revised its inflation outlook for the next fiscal year. It vowed to continue buying a necessary amount of Japanese government bonds without a cap to keep 10-year JGB yields close to zero percent.
Members agreed overall inflation is likely to stay above 2% through fiscal 2024 but may slow down in fiscal 2025. The central bank also adjusted its fiscal 2024 core inflation outlook to 2.4% from 2.8% and lifted the fiscal 2025 projection to 1.8% from 1.7%. Additionally, it increased the real economic growth forecast for fiscal 2024 to 1.2% from 1.0% while maintaining the fiscal 2025 estimate at 1.0%.
In the currency market, the U.S. dollar traded in the lower 151 yen-range on Monday.
Global markets showed mixed performances on Friday, with the Dow Jones sliding 305.47 points or 0.8% to 39,475.90, the S&P 500 slightly decreasing by 7.35 points or 0.1% to 5,234.18, and the Nasdaq growing by 26.98 points or 0.2% to a new record closing high of 16,428.82.
European markets also exhibited mixed results with the French CAC 40 Index dropping by 0.3%, the German DAX Index slightly growing by 0.2%, and the U.K.'s FTSE 100 Index climbing by 0.6%.
Friday also saw a decrease in crude oil prices driven by an appreciating dollar since the Federal Reserve is poised to keep interest rates higher for now. This resulted in West Texas Intermediate Crude oil futures for May falling by $0.44 to $80.63 a barrel.
