Japan's Inflation Eased to 9-Month Low, Manufacturing Activities Contracted for 5th Consecutive Month

Akira Ito
22 Nov, 2024
Tokyo

Japan's stock market indexes rebounded from the previous session's losses as investors reviewed updates on inflation and activities in the manufacturing and service sectors. 

The Nikkei 225 index gained 0.9% and the broader Topix index advanced 1%, but both indexes are set to close nearly unchanged after a week of trading. 

The annual rate of consumer price inflation in Japan eased to 2.3% in October from 2.5% in September, according to the latest data released by the Ministry of Internal Affairs & Communications. 

The overall inflation dropped to a nine-month low, and core inflation fell to a six-month low of 2.3%, down from 2.4% in September. 

The overall inflation eased after the effect of the ending of subsidies for electricity prices waned, and prices rose at 4% compared to 15.2% in the previous month. 

Still, overall and core inflation may support the case for the Bank of Japan to increase rates at a slower pace as consumers battle higher prices amid weak wage growth. 

Japan's manufacturing sector contracted for the fifth month in a row in November, but the service sector activities slightly expanded, according to two separate surveys published by S&P Global. 

The au Jibun Bank Japan Manufacturing PMI unexpectedly eased to 49.0 in November from 49.2 in October, the lowest level since March as both output and new orders decreased. 

The au Jibun Bank Japan Services PMI rose to 50.2 in November from 49.7 in the previous month, after the decline in foreign orders slowed and overall new orders rose at the modest pace and matched the rate in the previous month. 

The yen traded at 154.88 against the U.S. dollar in Tokyo trading near the close as investors reaffirmed the bets for the currency to cross the 160 level before the close of the year. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 0.9% to 38,369.81, and the broader Topix index advanced 0.7% to 2,701.42. 

Semiconductor equipment stocks rebounded tracking gains in New York after investors overcame initial concerns about the company's revenue growth outlook in the current quarter. 

Tokyo Electron increased 2.2% to ¥22,250.0, Advantest Corp. gained 0.6% to ¥9,443.0, and Lasertec jumped 0.3% to ¥17,335.0. 

Banks traded higher, and financial services stocks generally retained the upward bias. 

Mitsubishi UFJ Financial gained 1% to ¥1,825.0, Sumitomo Mitsui Financial Group advanced 1.9% to ¥3,667.0, and Mizuho Financial Group fell 0.3% to ¥3,838.0. 

Among the most actively traded stocks in Tokyo, Mitsui Chemicals jumped 5.6% to ¥3,593.0, Credit Saison advanced 6.6% to ¥3,694.0, and Yokogawa Electric added 4.9% to ¥3,572.0. 

Marubeni gained 0.5% to ¥2,401.50, Itochu Corp increased 0.3% to ¥7,610.0, Sumitomo Corp. advanced 1.7% to ¥3,291.0, and Mitsui & Co. Ltd. inched higher 1.5% to ¥3,320.0.