Japan Market extends losses

Headline shares of the Japan share market were lower on Friday, 10 August 2018, on following the mixed cues from Wall Street overnight and yen appreciation against greenback amid rising global trade tensions. Market losses were, however, limited, thanks to better than expected GDP data for June quarter. Among TSE33 issues, 25 issues declined, while 8 issues inclined, with shares of Mining, Metal Products, Marine Transportation, Insurance, Real Estate, and Electric Appliances issues being notable losers, while Oil & Coal Products, Fishery, Agriculture & Forestry, Transportation Equipment, and Foods issues were notable gainers. Around afternoon, the benchmark Nikkei 225 index dropped 0.54%, or 121.96 points, to 22,476.43. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 0.6%, or 10.23 points, to 1,729.93.

Investors risk sentiments remained subdued amid escalating U.S.-China trade dispute raised concerns about the outlook for global economic growth. The Chinese Ministry of Commerce's announcement of 25% tariff on $16 billion worth of U.S. goods. The goods being targeted by China include large passenger cars and motorcycles as well as various fuels and fiber optical cables. The announcement by China came after the U.S. finalized a list of approximately $16 billion worth of Chinese imports that will be subject to a 25% tariff. The second tranche of tariffs, which are due to take effect on August 23rd, follows the first tranche of tariffs on approximately $34 billion of Chinese imports that went into effect on July 6th.

 

Shares of export-related companies declined, hit by yen appreciation against greenback. Mitsubishi Electric, Panasonic, Sony, Canon, Honda, Toyota, and Mazda declined in a range of 0.1-1%.

ECONOMIC NEWS: Japan GDP expands 0.5% on Q2CY18 -- Japan's gross domestic product gained a seasonally adjusted 0.5% on quarter in the second quarter of 2018, following the 0.2% loss in the first quarter of 2018, according to the Cabinet Office preliminary reading released on Friday. On an annualized basis, GDP was up 1.9% following the 0.6% contraction in the previous three months. The GDP deflator was up 0.1% on year, down from 0.5% in the first quarter.

CURRENCY NEWS: The Japanese yen appreciated to upper 111 yen zone against U.S. dollar on Thursday, as trade war concerns continued to increase safe heaven demand.

OFFSHORE MARKET NEWS, US stock market closed mixed on Thursday as lingering trade war concerns overshadowed largely upbeat corporate earnings news The Dow Jones Industrial Average fell 74.52 points, or 0.29%, to 25,509.23 and the S&P 500 lost 4.12 points, or 0.14%, to 2,853.58, while the Nasdaq Composite added 3.46 points, or 0.04%, to 7,891.78.

The major European markets ended mixed on Thursday. The pan-European Stoxx Europe 600 index advanced 0.09%. The Euro Stoxx 50 index of eurozone blue chip stocks increased 0.02%, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.18%. The DAX of Germany climbed 0.34% and the CAC of France rose 0.01%. The FTSE 100 of the U.K. declined 0.45% and the SMI of Switzerland finished lower by 0.33%.

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