Tokyo Indexes Trimmed Weekly Gains, Japan's Trade Deficit Soared In July

Akira Ito
21 Aug, 2024
Tokyo

A stronger yen and tech weakness in New York dragged down market indexes in Tokyo in Wednesday's trading. 

The Nikkei 225 decreased 0.3%, and the broader Topix index dropped 0.2% after the yen resumed its upward move. 

The yen traded as high as 149.96 against the U.S. dollar, and market indexes turned lower because stronger yen contributes to the weakness in corporate earnings. 

Market sentiment was also weak after investors turned cautious on Wall Street and halted the 8-day rally amid worries about the high valuation of artificial intelligence-linked stocks. 

On the economic front, Japan's trade deficit soared in July after imports soared and exports rose at a slower pace, according to data from the Ministry of Finance. 

Exports rose 10.3% from a year ago to 9.6 trillion yen, accelerated from a 5.4% increase in the previous month, and rose for the eighth month in a row amid weakness in the yen, driving demand for machinery and semiconductor equipment. 

Imports soared 16.6% to 10.2 trillion from 8.7 trillion a year ago, resulting in a trade deficit increase of ninefold to 621.8 billion yen from 61.3 billion yen. 

Trade deficit with China increased 80% to 638.5 billion yen, and the surplus with the U.S. declined 9% to 768.6 billion yen. 

Trade deficit with Western Europe soared sixfold to 206.3 billion yen after exports declined 2% to 1.1 trillion yen and imports rose 13.7% to 1.3 trillion yen. 

 

Japan Stock Movers 

The Nikkei 225 stock average decreased 0.3% to 37,970.84, and the Topix index fell 0.2% to 2,664.49. 

Tech stocks led the decliners in Tokyo trading following losses in overnight trading in New York. 

Advantest, Disco Corp., Lasetec, SoftBank, and Tokyo Electron fell between 2% and 4%. 

Financial stocks also participated in the market selloff, with leading banks and insurance companies losing more than 1%. 

Sumitomo Mitsui, Mitsubishi UFJ, and Mizuho Financial declined between 0.4% and 1.7%. 

Dai-ichi Life declined 2.5% to ¥4,059.0, Tokio Marine Holdings dropped 1.9% to ¥5,474.0, and MS&AD eased 0.7% to ¥3,343.0. 

Seven & I Holdings jumped 3% to ¥2,044.50, and Canada's retail giant Alimentation Couche-Tard offered to buy the company for $38 billion. 

Tokyo-based Seven & I Holdings, which owns the 7-Eleven chain, said it has formed a special committee to review the offer.