The Japanese stock market saw a significant decline on Wednesday, erasing the strong gains from the previous session, influenced by broadly negative signals from Wall Street overnight. The Nikkei 225 index dropped, hovering just above the 38,000 mark, with widespread losses led by major players and technology stocks.
Heightened tensions in the Middle East impacted market sentiment, following Iran’s missile attack on Israel as retaliation for the killing of Hezbollah leader Hassan Nasrallah and other top officials.
The Nikkei 225 Index decreased by 640.69 points, or 1.66 percent, to 38,011.28, after hitting an intra-day low of 37,892.27. Japanese stocks had closed sharply higher on Tuesday.
Key market player SoftBank Group fell by over 1 percent, while Uniqlo operator Fast Retailing dropped more than 3 percent. In the automotive sector, Honda edged up 0.5 percent, whereas Toyota slipped 0.4 percent.
Within the tech sector, Advantest decreased by over 4 percent, and Tokyo Electron and Screen Holdings each dropped nearly 3 percent.
In the banking sector, Sumitomo Mitsui Financial lost over 1 percent, Mitsubishi UFJ Financial inched up 0.1 percent, and Mizuho Financial remained flat.
Among major exporters, Sony saw a decline of almost 5 percent, Panasonic edged down 0.4 percent, and Canon dropped nearly 1 percent, while Mitsubishi Electric gained almost 1 percent.
Among the notable losers, Isetan Mitsukoshi, TDK, and Murata Manufacturing each fell by nearly 5 percent, while ZOZO and Lasertec declined by over 4 percent. NEXON, Disco, Taiyo Yuden, and Chugai Pharmaceutical each lost nearly 4 percent, while Socionext, Nitto Denko, and Mitsubishi Chemical each slid by more than 3 percent.
Conversely, Inpex surged over 5 percent, Mitsubishi Motors gained more than 4 percent, and Idemitsu Kosan added over 3 percent, with ENEOS Holdings and Marubeni each rising nearly 3 percent.
In economic news, the Bank of Japan reported that the monetary base in Japan decreased by 0.1 percent year-on-year in September, totaling 669.446 trillion yen. This followed a 0.6 percent increase in August. Banknotes in circulation fell by an annual 1.1 percent, while current account balances rose by 0.2 percent, including a 3.0 percent jump in reserve balances. For the third quarter of 2024, the monetary base increased by 0.5 percent.
In the currency market, the U.S. dollar traded in the higher 143 yen range on Wednesday.
On Wall Street, stocks recovered some ground during Tuesday’s trading session but remained firmly negative after an early sharp decline. The major averages all fell, with the tech-heavy Nasdaq leading the downturn.
The Nasdaq dropped 278.81 points, or 1.5 percent, to 17,910.36. The S&P 500 fell by 53.73 points, or 0.9 percent, to 5,708.75, and the Dow declined by 173.18 points, or 0.4 percent, to 42,156.97.
Meanwhile, key European markets showed mixed performances following early strength. The U.K.'s FTSE 100 Index increased by 0.5 percent, while Germany’s DAX Index fell by 0.6 percent, and France’s CAC 40 Index declined by 0.8 percent.
Crude oil prices increased on Tuesday due to concerns over tight supplies amid rising tensions in the Middle East after Iran’s missile attack on Israel. West Texas Intermediate Crude oil futures for November closed up $1.66, or nearly 2.5 percent, at $69.83 a barrel.
