The Japanese stock market experienced declines over consecutive sessions, losing nearly 400 points, equivalent to a 1% drop. The Nikkei 225 now rests slightly above the 39,560 mark, with potential further declines anticipated as the week progresses. The weak sentiment in Asian markets is largely led by downturns in oil and technology stocks, mirroring the trend observed in European and U.S. markets, which also faced losses.
On Monday, the Nikkei posted a modest decline, driven by losses in technology stocks, although it saw gains in the automotive sector and a mixed performance within financials. It closed the day down 366.18 points, or 0.92%, at 39,565.80, after fluctuating between 39,520.79 and 40,255.68. Among notable stock movements, Nissan Motor increased by 0.26%, Mazda Motor surged 2.09%, Toyota Motor advanced 1.37%, and Honda Motor rose 1.05%. In contrast, Softbank Group plummeted 8.32%, Mitsubishi UFJ Financial gained 0.73%, Mizuho Financial increased 1.58%, Sumitomo Mitsui Financial saw a rise of 1.55%, while Mitsubishi Electric decreased by 1.22%, Sony Group edged up 0.31%, Panasonic Holdings dipped 0.36%, and Hitachi tumbled 3.82%.
The lead from Wall Street provided little comfort, with significant losses noted across major indices. Although the Dow Jones Industrial Average managed a recovery, climbing 289.33 points, or 0.65%, to 44,713.58, the NASDAQ plummeted by 612.47 points, or 3.07%, to close at 19,341.83, and the S&P 500 fell 88.96 points, or 1.46%, finishing at 6,012.28.
The sell-off on Wall Street was significantly influenced by a sharp decline in technology stocks, particularly following substantial drops from Nvidia (NVDA), after DeepSeek's AI Assistant surpassed ChatGPT as the leading free app on Apple's U.S. App Store. Moreover, traders are apprehensive about the Federal Reserve's upcoming meeting, despite expectations for stable interest rates. Market participants will closely scrutinize any statements that might hint at future rate changes, especially amid recent economic data sparking concerns about prolonged unchanged rates.
In commodities, oil prices plummeted on Monday, dropping due to tariff threats and uncertainties in U.S. trade policy, combined with weak manufacturing data from China raising fears about future demand. West Texas Intermediate Crude oil futures for March closed down $1.49, or 2%, at $73.17 per barrel. Meanwhile, Japan is set to release its December producer price data, expecting year-over-year growth at 2.1%, slightly down from 3.0% in the prior month.
