FX.co ★ Japanese Market Notably Higher

The Japanese stock market experienced a notable rise on Monday, reversing the minor losses from the previous session. The benchmark S&P/ASX 200 is approaching the 38,900 mark, despite broadly negative signals from global markets on Friday. Gains are seen across most sectors, especially among index heavyweights and financial stocks, as Japan's annualized GDP decline for the first quarter was less significant than anticipated.

The benchmark Nikkei 225 Index increased by 193.64 points, or 0.50 percent, to 38,877.57, after an earlier peak of 38,911.09. Japanese shares closed slightly lower on Friday.

Key market players, including SoftBank Group and Fast Retailing—the operator of Uniqlo—are showing gains of 1.5 percent and almost 1 percent, respectively. In the automotive sector, Honda and Toyota are both up nearly 2 percent.

Within the tech sector, Screen Holdings has gained almost 1 percent, Advantest is up 0.3 percent, whereas Tokyo Electron has dipped by 0.2 percent.

The banking sector shows a positive trend with Sumitomo Mitsui Financial advancing 1.5 percent, and both Mizuho Financial and Mitsubishi UFJ Financial increasing by more than 1 percent each.

Among major exporters, Sony has edged down 0.4 percent, while Mitsubishi Electric has climbed almost 1 percent, and Panasonic has risen nearly 2 percent. Canon remains unchanged.

Significant gainers include Socionext and Sharp, each up by more than 4 percent. Hitachi, Sumitomo Pharma, and ENEOS have each added more than 3 percent. Dai-ichi Life, Sompo Holdings, Fujitsu, Sumitomo Electric Industries, and Tokyo Gas have all advanced nearly 3 percent.

Conversely, Kao is down almost 5 percent, and M3 has decreased by nearly 3 percent.

Economic data indicates that Japan's GDP contracted by a seasonally adjusted 0.5 percent in the first quarter of 2024, consistent with forecasts and unchanged from last month's advance estimate. GDP grew 0.1 percent in the fourth quarter of 2023. On an annualized basis, GDP was revised up to -1.8 percent from -2.0 percent. GDP rose by 0.2 percent annually in the prior three months.

In the currency market, the U.S. dollar is trading in the higher 156 yen range on Monday.

Wall Street showed indecision throughout Friday's trading session, echoing Thursday's lackluster performance. Major indices fluctuated across the unchanged line before closing slightly lower. The S&P 500, which hit a new intraday high early in the afternoon, ended down 5.97 points or 0.1 percent to 5,346.99. The Dow fell 87.18 points or 0.2 percent to 38,798.99, while the Nasdaq dropped 39.99 points or 0.2 percent to 17,133.13.

European markets also declined, with Germany's DAX Index, France's CAC 40 Index, and the U.K.'s FTSE 100 Index each falling by 0.5 percent.

Crude oil prices remained flat on Friday amid concerns that the Federal Reserve may maintain higher interest rates for a longer period following a stronger-than-expected U.S. non-farm payroll report for May. West Texas Intermediate Crude oil futures for July settled at $75.53 a barrel, down $0.02, and WTI crude futures fell about 2 percent over the week.