Tokyo Stocks Lose Early Momentum, Japan's Trade Deficit Shrank In August

Akira Ito
18 Sep, 2024
Tokyo

Benchmark indexes in Tokyo lacked direction and lost early morning momentum after Japan's exports and import growth fell short of market expectations. 

The Nikkei 225 average edged up a fraction, and the wider Topix index traded around the flatline amid weak market sentiment. 

The yen traded at 141.55 against the U.S. dollar in Tokyo as investors awaited the rate decisions from the U.S. Federal Reserve later in the day. 

Japan's exports in August increased 5.6% to 8.4 trillion yen, or $59.2 billion, and slowed sharply from a 10.2% increase in the previous month, the Ministry of Finance reported Wednesday. 

The exports struggled to increase after several automakers shut down manufacturing plants ahead of the typhoon, denting overall exports because of weather-related issues. 

Exports to the U.S. decreased for the first time in three years after the shipment of automobiles, pharmaceuticals, and construction machinery struggled to advance. 

However, shipment of semiconductor equipment soared 40% from a year ago. 

Shipments to Europe fell 8.1%, but exports to mainland China, Hong Kong, and Taiwan increased 5.2%, 27.3%, and 21.6%, respectively. 

Exports to India soared 26.6% and to Russia advanced 17.9%. 

Japan's imports in August increased 2.3% to 9.1 trillion yen, widening its trade deficit to 695.3 billion yen, or $4.9 billion. 

Japan recorded a trade deficit for the second month in a row, but the overall deficit shrank 26% from a year ago, supported by the rise in shipment of chip-making equipment, electronic components, and semiconductors. 

In other economic news, Japan's core machinery orders, which exclude volatile and large-ticket ships and electric power plants, decreased 0.1% from the previous month in July to 874.9 billion yen. 

On an annual basis, private sector core orders increased 8.7% after falling 1.7% in June, according to a report released by the Cabinet Office on Wednesday. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 0.2% to 36,287.98, and the Topix index decreased 0.1% to 2,553.98. 

Tech stocks were volatile after market indexes lost early gains and turned negative. 

Tokyo Electron increased 0.1% to¥22,465.0, Advantest Corp. gained 1.1% to ¥6,125.0, and Screen Holdings added 1.8% to ¥9,746.0. 

Retailers traded mixed after the yen hovered near its 2024 high. 

Seven & I decreased 0.3% to ¥2,151.50, Fast Retailing increased 1.4% to ¥44,820.0, and Isetan Mitsukoshi fell 3.2% to ¥2,125.0. 

Financial services providers edged  higher ahead of the Bank of Japan's rate decisions on Friday. 

Mitsubishi UFJ Financial decreased 0.1% to ¥1,417.50, Sumitomo Mitsui Financial gained 0.5% to ¥8,795.0, and Mizuho Financial increased 0.6% to ¥2,764.50.