FX.co ★ Japanese Market Sharply Lower; Down 2.4%

The Japanese stock market experienced a significant downturn on Monday, erasing the gains it had made previously. The S&P/ASX 200, a benchmark index, plummeted 900 points to fall below the 38,800 mark. This downward trend was influenced by broad negative signals from Wall Street last Friday, with major sectors including technology, experiencing a slump.

The famous Nikkei 225 Index has fallen by 947.67 points or 2.39 percent to 38,741.27, after a previous low of 38,698.22. In spite of this significant loss, shares in Japan saw a modest increase on Friday.

Major share contributors such as the SoftBank Group and Fast Retailing, the Uniqlo operator, are experiencing losses of more than 5 percent and 1 percent respectively. Among car manufacturers, Honda has lost almost 2 percent, while Toyota has seen a decrease of more than 3 percent.

In the technology sector, Screen Holdings has lost nearly 6 percent, Advantest has gone down more than 6 percent, and Tokyo Electron has fallen almost 4 percent. Banks like Sumitomo Mitsui Financial, Mizuho Financial, and Mitsubishi UFJ Financial are each losing over 3 percent.

Large export companies are also seeing losses. Canon has lost more than 3 percent and Sony is down by 1.5 percent, while Mitsubishi Electric and Panasonic have each lost almost 3 percent.

Notable losers include Renesas Electronics, Mitsui Mining & Smelting and Pacific Metals, which are all down almost 5 percent. Other notable losers, which declined more than 4 percent, are Yaskawa Electric, Toyota Tsusho, Minebea Mitsumi, JTEKT, Fujikura, Nissan Motor, Kawasaki Heavy Industries, and Hitachi.

On a positive note, Dai Nippon Printing has seen gains of more than 4 percent while Teijin has advanced more than 3 percent.

As for economic news, Japan's gross domestic product had a seasonally adjusted expansion of 0.1 percent in the fourth quarter of 2023, lower than the forecasted increase of 0.3 percent, following a 0.7 percent contraction in the previous quarter.

Annually, the GDP rose by 0.4 percent, which exceeded expectations of a 0.4 percent contraction, following a 2.9 percent decline in the preceding quarter. The GDP capital expenditure rose by 2.0 percent for the quarter, beating the forecasts predicting a decline of 0.1 percent after a 0.4 percent slip in the third quarter.

The Bank of Japan also reported that the M2 money stock in Japan increased by 2.5 percent year-on-year in February, exceeding forecasts of a 2.4 percent increase and matching the reading from January. The L money stock rose by 2.3 percent to 2,125.5 trillion yen, slowing from the 2.5 percent increase in the previous month.

In the currency exchange market, the U.S. dollar traded at a high against the yen on Monday.

Meanwhile, Wall Street witnessed mixed trading patterns: initial gains were soon followed by significant downturns. Both the Nasdaq and major averages ended the day firmly in the red.

Conversely, European markets showed varied performance, and crude oil prices fell due to demand uncertainty, particularly from China after data revealed a drop in the country's oil imports in the first two months of the year.