Japan's stock market continued its downturn on Friday, amplifying the sharp losses seen in the previous session. Following negative cues from global markets overnight, the benchmark Nikkei 225 fell more than 4%, sinking below the 36,600 level. Weakness was evident across all sectors, particularly in index heavyweights, technology, and financial stocks.
Traders responded to the Bank of Japan’s hawkish monetary policy shift and weak economic data from the U.S., Europe, and China.
The Nikkei 225 Index dropped 1,609.95 points, or 4.22%, to 36,516.38, hitting a low of 36,107.29 earlier in the session. Japanese stocks had also closed sharply lower on Thursday.
Market giant SoftBank Group is down almost 6%, while Uniqlo operator Fast Retailing is declining 1.5%. In the automotive sector, Honda and Toyota are both losing over 2%.
In technology, Advantest fell over 7%, with Tokyo Electron and Screen Holdings each sliding more than 10%.
In banking, Mitsubishi UFJ Financial plunged nearly 8%, Mizuho Financial declined almost 7%, and Sumitomo Mitsui Financial slid over 7%.
Major exporters were not spared either, with Mitsubishi Electric falling nearly 6%, Canon dropping almost 3%, Sony slipping over 5%, and Panasonic down almost 1%.
Other major losers included Daiwa Securities, plummeting more than 16%, and Socionext, Ebara, Dai-ichi Life, and Isetan Mitsukoshi, each falling over 9%. Mitsui & Co., AGC, and Mitsui Chemicals also slid nearly 9%, with Fuji Electric, Lasertec, and Hitachi dropping over 8% and NEC declining nearly 8%.
Conversely, NH Foods soared over 8% and Konami Group surged almost 8%.
In economic news, the Bank of Japan reported that the monetary base rose 1.0% year-over-year in July, exceeding expectations of a 0.9% gain and accelerating from 0.6% in June. Banknotes in circulation dropped 0.9%, including a 1.5% fall in coins. However, current account balances rose 1.5% annually, with a 3.6% jump in reserve balances. The adjusted monetary base increased by 0.8% after a 6.5% drop in the previous month.
In currency trading, the U.S. dollar was in the lower 149 yen range on Friday.
On Wall Street, stocks fell sharply on Thursday after extending the prior day's rally early in the session. Major averages posted substantial declines.
The Nasdaq plunged 405.25 points, or 2.3%, to 17,194.15, the S&P 500 tumbled 75.62 points, or 1.4%, to 5,446.68, and the Dow slumped 494.82 points, or 1.2%, to 40,347.97.
European markets also experienced significant declines, with the U.K.'s FTSE 100 down 1.0%, and both the French CAC 40 Index and the German DAX Index falling by 2.1% and 2.3%, respectively.
Crude oil futures settled lower on Thursday amid concerns about disappointing economic data and oil demand prospects. West Texas Intermediate Crude for September delivery fell by $1.60, or 2.05%, to $76.31 a barrel.
