Japanese equities tumbled sharply on Friday. The decline continued from the day before. Investors processed a broadly negative performance from U.S. markets. The key Nikkei 225 Index dropped 554.68 points. This is a 1.95 percent decrease. It closed at 27,934.45. The session low reached 27,915.60. Despite the overall decline, Fast Retailing stood out. It is the parent company of the popular clothing brand Uniqlo. Its shares jumped over 7 percent. This came after the firm reported record first-quarter earnings. Persistent worries about Omicron-fueled surges in daily COVID-19 cases kept traders cautious. These cases have remained above 10,000.
Among market heavyweights, SoftBank Group lost more than 2 percent. The auto sector was also hit hard, with Toyota and Honda each slipping over 1 and nearly 2 percent, respectively. Sony, a major name in consumer electronics, saw its shares fall by almost 3 percent. These drops echoed the struggles on Wall Street, particularly the tech-laden Nasdaq, which closed at its weakest level in three months after a significant downturn on Thursday. The broad market averages also ended lower, reflecting growing uncertainty and risk aversion among global investors.
Japan’s producer prices dropped 0.2 percent in December. This missed analyst expectations for a 0.3 percent rise. It contrasted with the upwardly revised 0.7 percent gain in November. On a yearly basis, prices were up 8.5 percent. This was below the 8.8 percent forecast. It was also lower than the upwardly revised 9.2 percent in the prior month. Export prices saw a 0.8 percent drop for the month. They climbed 13.5 percent year-on-year. This signaled mixed conditions for Japanese exporters in the global market.
Import prices fell 0.4 percent in December but surged 41.9 percent on an annual basis. The data, which was provided by the Bank of Japan, highlights the uneven economic landscape, with some sectors facing headwinds while others show resilience. The sharp rise in import prices suggests continued inflationary pressures, even as domestic production costs remain subdued in the short term.
The U.S. dollar edged up against the Japanese yen on Friday, with the pair settling around the 113 yen level. This movement came as investors evaluated the global economic outlook, which has been clouded by rising Omicron case numbers and the recent downturn in equity markets. The stronger dollar reflected increased demand for safe-haven assets and a shift in risk appetite among international investors.
In the currency market, the U.S. dollar is trading in the lower 115 yen-range on Wednesday. On Wall Street, stocks once again moved in opposite directions during trading on Tuesday, closing mixed for the fourth consecutive session. While the Nasdaq extended the sharp pullback seen in the previous session, the Dow and the S&P 500 moved to the upside. The Nasdaq climbed well off its worst levels of the day but still closed down 79.62 points or 0.5 percent at 15,775.14. Meanwhile, the Dow climbed 194.55 points or 0.6 percent to 35,813.80 and the S&P 500 rose 7.76 points or 0.2 percent at 4,690.70. Meanwhile, European stocks moved mostly lower over the course of the session. The German DAX Index slumped by 1.1 percent and the French CAC 40 Index slid by 0.9 percent, although the U.K.'s FTSE 100 Index bucked the downtrend and inched up by 0.2 percent.
In economic news, the manufacturing sector in Japan picked up steam in November, according to a latest survey from Jibun Bank, revealing a manufacturing PMI score of 54.2. This is up from 53.2 in October and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI improved to 52.1 in November from 50.7 in October, and the composite PMI rose to 52.5 from 50.7.
Producer prices in Japan accelerated 9.3 percent on year in February, the Bank of Japan said on Thursday. That exceeded expectations for an increase of 8.7 percent and was up from the upwardly revised 8.9 percent in January (originally 8.6 percent). On a monthly basis, producer prices jumped 0.8 percent - again beating forecasts for 0.6 percent but unchanged from the previous month following an upward revision from 0.6 percent. The U.S. dollar is trading in the 116 yen-range on Thursday. On Wall Street, stocks showed a substantial move back to the upside during trading on Wednesday after closing lower for four consecutive sessions. The major averages all moved sharply higher on the day, with the tech-heavy Nasdaq posting a standout gain. The major averages pulled back off their highs going into the close but remained firmly positive. The Dow jumped 653.61 points or 2 percent to 33,286.25, the Nasdaq spiked 459.99 points or 3.6 percent to 13,255.55 and the S&P 500 surged 107.18 points or 2.6 percent to 4,277.88. The major European markets also moved sharply higher on the day. While the U.K.'s FTSE 100 Index spiked by 3.3 percent, the French CAC 40 Index and the German DAX Index skyrocketed by 7.1 percent and 7.9 percent, respectively. Crude oil prices plunged sharply on Wednesday, a day after recording their highest close in 14 years, after analysts said the U.S. and U.K. ban on Russian oil imports will be far less disruptive to global markets than a full international embargo. West Texas Intermediate Crude oil futures for April ended down by $15 or 12.1 percent at $108.70 a barrel.