Japan Indexes Struggled to Advance, Capital Spending In Second Quarter Accelerated

Akira Ito
02 Sep, 2024
Tokyo

Benchmark indexes in Tokyo opened higher and extended gains of the previous month but face selling pressure in the afternoon trading. 

The Nikkei 225 and Topix indexes closed nearly unchanged after market indexes struggled to hold early lead. 

Market sentiment weakened after capital spending for plant and equipment in the second quarter rose at a slower-than-expected pace of 7.4%, the Ministry of Finance reported Monday. 

Capital spending stayed positive for the thirteenth quarter in a row and accelerated from an increase of 6.8% in the first quartet. 

Electricity production and transmission spending soared nearly 32%, followed by an increase of 23.7% in real estate and 20.6% in transportation. 

However, fabricated metal products spending declined 25.1%, machinery production fell by 15.6%, and wholesale and retail trade fell 8.9%. 

The final update on the manufacturing activities showed activities remained in contraction, according to the S&P Global Market Intelligence. 

The final au Jibun Bank Japan manufacturing purchasing managers' index edged up to 49.8 in August from 49.1 in July, and the index improved from 49.5 reported in the preliminary estimate. 

The index stayed below 50, the level that separates expansion from contraction. 

Weak new order trends from key customers in China and South Korea continued to weigh on the overall index. 

The yen edged slightly lower to 146.45 against the U.S. dollar, supporting the early rise in benchmark indexes. 

 

Japan Stock Movers 

The Nikkei 225 stock average increased 0.1% to 38,680.61 and the Topix index rose 0.09% to 2,714.96.

Banks edged higher in Tokyo in Monday's trading as investors awaited the Bank of Japan's monetary policy decisions later in the month. 

Sumitomo Mitsui Financial increased 0.5% to ¥9,597.0, Mitsubishi UFJ gained 1.3% to ¥1,548.50, and Mizuho Financial Group jumped 1.7% to ¥3,059.0. 

IHI Corp. increased 5.5% to ¥6,688.0, Kawasaki Heavy Industries advanced 3.5% to ¥5,321.0, Yakasawa Electric edged higher 1.4% to ¥4,900.0, and Tokyo Electric advanced 0.5% to ¥698.10. 

Seven & I Holding advanced 2.8% to ¥2,156.50, Takashimaya gained 2.7% to ¥1,146.50, Fast Retailing gained 0.4% to ¥46,820.0, and Isetan Mitsukoshi jumped 2% to ¥2,236.50. 

Sumitomo Pharma declined 6% to ¥628.0, Chugai Pharma decreased 6% to ¥6,936.0, and Toto fell 2.9% to ¥4,911.0.