Market Commentary - Foreign Markets
Japan Market extends losses As on : 22-May-24  15:46

Japan share market finished lower for second straight session on Wednesday, 22 May 2024, as investors continued booking recent gains amid caution ahead of earnings results from US chipmaker Nvidia. Also weighing sentiments was domestic firms? cautious outlooks amid uncertainties about interest rate and currency moves.

Markets are also bracing for further rate hikes by the Bank of Japan this year. Bond yields have risen this month on hawkish hints from the central bank as it seeks to contain the yen's depreciation.

At closing bell, the 225-issue Nikkei Stock Average index was down 329.83 points, or 0.85%, to 38,617.10. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 22.36 points, 0.81%, to 2,737.36.

Shares of chip-related companies declined ahead of Nvidia earnings. Tokyo Electron declined 1.2% and Advantest, which counts Nvidia among its customers, fell 0.8%.

ECONOMIC NEWS: Japan Exports Rise 8.3% On Year In April-In April, Japan?s exports increased by 8.3% y-o-y to JPY 8981B, falling short of expected 11.1% growth. Nonetheless, this marks the fifth consecutive month of export growth and sets a record for April. Key contributors to this growth included hybrid cars, semiconductor-making equipment, and chips. Imports also rose by 8.3% y-o-y to JPY 9443B, slightly below expected 9.0% increase, and set a record for the month. The weak Ten continues to inflate import costs for resource-scarce Japan, with crude oil prices jumping 17.7% y-o-y, compared to a 2.6% y-o-y increase in Dollar terms. This resulted in a trade balance deficit of JPY -463B. On a seasonally adjusted basis, exports rose 0.9% mom to JPY 8843B, while imports decreased by -0.5% mom to JPY 9403B, leading to a trade balance deficit of JPY -561B.

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