Japan Indexes Extend Weekly Losses, Core Consumer Inflation Accelerated In June

Akira Ito
19 Jul, 2024
Tokyo

Stocks in Japan struggled for clear direction as investors reviewed the latest inflation update and tech stocks rebounded. 

The Nikkei 225 stock average and the Topix index traded down in the afternoon session and extended weekly losses after a volatile week of trading. 

Overall, consumer price inflation held steady at 2.8%, but the core rate of inflation accelerated for the second consecutive month to 2.6% amid the ending of energy subsidies and elevated food price inflation. 

Tech stocks attempted to rebound but remained on shaky ground after a report on Thursday suggested that the U.S. is preparing to put additional curbs on trade with China that could be damaging to export sales of Japan's advanced semiconductor equipment makers. 

 

Japan's CPI Held Steady In June 

Japan's annual rate of inflation held steady at 2.8% in June, the Ministry of Internal Affairs and Communications reported Friday. 

The sustained inflationary pressures in electricity, energy, food, and housing contributed to overall inflation. 

Electricity price inflation eased to 13.4% from 14.7% in May, gas costs rose for the first time in thirteen months to 2.4% from a decrease of 2.5%, food price inflation eased to 3.6% from 4.1%, and house price inflation held steady at 0.6%. 

The core rate of inflation, which excludes volatile food prices, accelerated for the second month in a row to 2.6% in June from 2.5% in the previous month, stoking speculation that the Bank of Japan may start a rate hike sooner rather than later. 

The monthly inflation rate slowed to 0.3% in June from the 7-month high of 0.5% in May. 

 

Japan Stock Movers 

The Nikkei 225 stock average declined 0.4% to 39,980.47, and the Topix index dropped 0.5% to 2,855.33. 

For the week, the Nikkei 225 dropped 3.9% and the Topix declined 1.9%. 

Tokyo Electron, Advantest, Screen Holdings, Lasertec, and Renesas Electronics rebounded between 1% and 2% after plunging as much as 10% in Thursday's trading. 

Among actively traded stocks, Mitsubishi Electric, Sony, and Canon declined between 0.4% and 0.6%. 

Disco Corp. declined 4.9% to ¥52,560.0, despite the precision toolmaker for the semiconductor manufacturing industry reporting a sharp jump in profit in the latest quarter.

Disco stock declined because sales and earnings were below market expectations. 

Sales in the June quarter increased 53% to 82.8 billion yen, and net income rose 87% to 23.7 billion yen from a year ago, respectively. 

For the first half, the company estimated sales of 168.4 billion yen and net income of 46.8 billion yen.