Japan Indexes Turned Lower and Current Account Surplus Widened, Sumco and Shiseido In Focus

Akira Ito
08 Aug, 2024
Tokyo

The market rally in Tokyo lost steam as investors stayed cautious after a week of volatile trading and the strengthening of the yen. 

The Nikkei 225 and the Topix indexes dropped more than 0.7%, and the yen continued to drift lower amid worries about the future rate path. 

Calmness returned to financial markets in Tokyo after deputy governor Shinichi Uchida reassured investors that the central bank would refrain from raising rates amid volatile market conditions. 

However, investors turned cautious on Thursday following the weak close in New York in overnight trading, and artificial-intelligence-linked stocks failed to rebound. 

The summary of opinions from the latest policy meeting of the Bank of Japan in July showed some members urged even larger rate increases. 

Closer to home on the economic front, the current account surplus widened to 1.533 trillion in June from 1.519 trillion in the corresponding month a year ago, the Ministry of Finance reported Thursday. 

The current account surplus rose for the 17th month in a row, following faster increases in exports than imports. 

The surplus in goods increased to 556.3.9 billion yen from 328.0 billion a year ago, driven by a 5.9% increase in exports faster than a 3.4% rise in imports.

Meanwhile, the deficit in secondary income decreased to 120.7 billion from 132.4 billion. 

The primary income surplus narrowed to 1,473.7 billion from 1,680 billion in the previous year, and the gap in the services account slightly widened to 375.8 billion from 356.2 billion. 

 

Japan Stock Movers 

The Nikkei 225 stock average decreased 0.7% to 34,829.31, and the Topix index dropped 1.2% to 2,458.63. 

Advanced chipmakers turned lower, tracking volatile trading in New York. 

Advantest, Tokyo Electron, Screen Holdings, Disco Corp., and Softbank declined between 3% and 7%. 

Sumco Corp. plunged 15.8% to ¥1,687.0 after the Japanese semiconductor company reported a decline in earnings in the June quarter. 

Net sales declined 5.4% to ¥104.7 billion, and net income plunged 37% to ¥7.56 billion from a year ago, respectively. 

Financial stocks were among the leading decliners after gyrating by more than 15% in previous trading sessions. 

Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho Financial Group fell between 1% and 3%. 

Shiseido dropped 15.3% to ¥3,810.0 after the Japanese cosmetics company said weak China demand hit sales and earnings in the June quarter. 

Shiseisdo stock plunged the most in several decades after its earnings were negatively impacted by weak demand in China. 

Revenues in the June quarter were 259.1 billion, and net income was 3.3 billion yen. 

Revenue in the first half increased by 14.3% to 508.5 billion yen from 494.2 billion yen, and net income dropped to a breakeven point from 11.8 billion yen a year ago. 

However, the company retained its full-year sales estimate of 1 trillion yen, net income of 22 billion yen, and annual dividend of 60 yen per share.