Nikkei Index In Tokyo Halts a Two-day Rally, Automakers In Focus

Akira Ito
04 Jun, 2024
Tokyo

Japan's stock market indexes halted two-day gains amid weak market sentiment, valuation worries, and a lack of catalysts. 

The Nikkei and the Topix index turned lower following mixed closings in overnight trading in New York after the U.S. manufacturing sector contracted for the second month in a row, according to a private survey. 

The weakness in the U.S. manufacturing sector raised speculation that the U.S. Federal Reserve may be able to pass at least one rate cut before the end of the year. 

Automakers were in focus after Japanese automakers reported a 15.7% increase in vehicle sales in North America in May to 2.2 million units. 

Closer to home, investors are looking ahead to the release of Japanese wage and household data this week. 

The Japanese yen hovered near 156.03 against the U.S. dollar in late afternoon trading in Tokyo as investors continued to bet on additional weakness in the Japanese yen. 

Crude oil futures prices extended a two-day drop to 5% after OPEC+ announced its plans to phase out voluntary production cuts over the next year. 

Brent crude oil futures for immediate-month delivery decreased 1.1% to $77.64 per barrel. 

 

Japan Stock Movers 

The Nikkei 225 stock average decreased 0.4% to 38,766.29, and the Topix index dropped 0.4% to 2,786.64. 

Tech stocks were among the leading decliners following the weakness in overnight trading in New York. 

Advantest, Tokyo Electron, Screen Holdings, and Softbank declined between 0.3% and 1.2%. 

Banks lacked direction, and Sumitomo Mitsui traded nearly unchanged, Mizuho Financial declined 0.3%, and Mitsubishi UFJ fell 1.0%. 

Toyota Motor decreased 1.3% to ¥3,299.0 after the vehicle maker temporarily halted shipments of some models on safety concerns. 

Nissan Chemical advanced 4.2% to ¥4,814.0, and J. Front Retailing added 3.2% to ¥1,600.50. 

Diversified conglomerates, known as Shogo Shosha, traded down. 

Mitsui & Company fell 2.9% to ¥7,846.0, Mitsubishi Corp. fell 1.6% to ¥3,305.0, Marubeni declined 1.7% to ¥3,037.0, and Itochu decreased 1% to ¥7,457.0.