FX.co ★ Japanese Market Sharply Lower; Down 2%

The Japanese stock market experienced a sharp decline on Friday, reversing gains from the previous three sessions. Mixed cues from Wall Street contributed to this downturn. The benchmark Nikkei 225 fell by approximately 2% to dip below the 41,400 level. This decline was primarily driven by weaknesses across various sectors, particularly among index heavyweights, exporters, and technology stocks.

The Nikkei 225 Index fell 829.66 points, or 1.96%, to 41,394.36, having earlier hit a low of 41,188.29. This is in stark contrast to Thursday when Japanese stocks closed significantly higher.

Among the market heavyweights, SoftBank Group saw a loss of more than 3%, and Uniqlo operator Fast Retailing declined by almost 4%. In the automotive sector, Honda dropped nearly 1%, and Toyota edged down by 0.3%.

In the technology sector, Advantest fell nearly 5%, Tokyo Electron declined by more than 6%, and Screen Holdings was down by 4.5%.

The banking sector also saw significant losses, with Sumitomo Mitsui Financial, Mizuho Financial, and Mitsubishi UFJ Financial each losing over 2%.

Major exporters fared no better, with Mitsubishi Electric almost down by 2%, Panasonic declining by nearly 1%, Sony dropping more than 2%, and Canon slipping by almost 3%.

Noteworthy losers included Disco, which plummeted by almost 8%, and Seven & I Holdings, which fell by more than 7%. Renesas Electronics and Dai-ichi Life Holdings both dropped by nearly 5%. Tokio Marine and T&D Holdings each recorded losses exceeding 4%, while Isetan Mitsukoshi, MS&AD Insurance, and Taiyo Yuden each declined nearly 4%. Takashimaya fell by over 3%.

Conversely, M3 and Nitori Holdings saw gains of more than 4%, with OKUMA adding almost 3%.

In the currency market, the U.S. dollar was trading in the lower 159-yen range on Friday.

On Wall Street, stocks experienced a substantial downturn on Thursday. The Nasdaq and the S&P 500 pulled back sharply after reaching new record intraday highs earlier in the day. The Nasdaq fell sharply by 364.04 points, or 2.0%, to 18,283.41. The S&P 500 declined by 49.37 points, or 0.9%, to 5,584.54. The Dow, however, managed to stay near the unchanged line for most of the day before closing up by 32.39 points or 0.1% at 39,753.85.

In Europe, major markets moved upward on Thursday. The U.K.'s FTSE 100 Index rose by 0.4%, while both the French CAC 40 Index and the German DAX Index climbed by 0.7%.

Crude oil prices settled higher on Thursday, spurred by hopes of an interest rate cut by the Federal Reserve following encouraging inflation data. West Texas Intermediate (WTI) crude oil futures for August settled at $82.62 a barrel, down $0.52.