Japan's Indexes Halt 4-Day Rally, Large Business Sentiment Improves

Akira Ito
13 Dec, 2024
Tokyo

Stock market indexes in Japan halted a four-day slide, and the yen remained in focus ahead of the Bank of Japan's rate decisions. 

The Nikkei 225 stock average and Topix indexes dropped 1%, following the weakness in New York. 

For the week, the Nikkei and the Topix indexes advanced 1.1%, tracking gains in tech stocks in the U.S. markets, but remained range bound ahead of the Bank of Japan's rate decisions next week. 

On the economic front, the Bank of Japan's Tankan survey of large business sentiment increased to 14 in the fourth quarter, higher than 13 in the previous two consecutive quarters. 

Capital expenditure by large firms in the current fiscal year ending in March is estimated to rise 11.3%, from the previous estimate of 10.6%. 

Business sentiment strengthened among businesses active in the production of petroleum and coal, chemicals, paper & pulp, and general-purpose machinery. 

The Japanese yen weakened to 152.77 against the U.S. dollar ahead of rate decisions by the Bank of Japan and the U.S. Federal Reserve next week. 

The European Central Bank lowered its benchmark rate by 25 basis points to 3.0%, the fourth rate cut in 2024 amid a weakening economic backdrop in the currency union. 

The Swiss National Bank cut its key lending rate by 50 basis points to 0.5%, and the central bank estimated annual economic growth to stay near 1%. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average dropped 1% to 39,470.44, and the broader Topix index fell 0.95% to 2,746.48. 

Mitsubishi UFJ Financial Group declined 1.1% to ¥1,849.50, Sumitomo Mitsui Financial Group dropped 1% to ¥1,849.50, and Mizuho Financial Group fell 0.8% to ¥3,817.0. 

Heavy industry stocks were among the leading decliners after the release of the quarterly survey. 

Kawasaki Heavy Industries Ltd. dropped 3.3% to ¥6,410.0, IHI Corp. fell 5.4% to ¥8,278.0, and Mitsubishi Heavy Industries fell 4.1% to ¥2,291.50. 

Volatile semiconductor equipment and services provider declined following a weakness in tech stocks in overnight trading in New York. 

Tokyo Electron fell 3.2% to ¥23,860.0, Advantest Corp. gained 5.8% to ¥9,380.0, and Screen Holdings eased 3.3% to ¥9,302.0.