Japan Stocks mixed

Headline equities of the Japan share market were mixed after recouping initial losses on Friday, 31 August 2018, as investors risk sentiments were muted amid negative cues from Wall Street overnight after reports that U.S. President Donald Trump intends to move ahead with plans to impose tariffs on $200 billion in Chinese imports, stronger yen against greenback, and weaker than expected Japan's industrial output data. Total 17 issues out of 33 TSE index inclined, with shares of Precision Instruments, Warehousing & Harbor Transportation Services, Pharmaceutical, Real Estate, and Services issues being notable gainers, while Oil & Coal Products, Iron & Steel, Banks, and Insurance issues were notable losers. Around late afternoon trade, the benchmark Nikkei 225 index rose 0.04%, or 10.04 points, to 22,879.54. The broader Topix index of all First Section issues on the Tokyo Stock Exchange edged up 0.02%, or 0.31 point, to 1,739.45.

Japan's factory output dropped marginally in July, marking the third successive month of decline, due to slowing exports of cars and steel and flooding that disrupted production, compounded by global trade tensions that cloud the export-reliant economy's outlook.

 

China kept its tariff dispute with the United States in-focus as its commerce ministry insisted negotiations must be based on "equality," with Washington's proposed tariffs on an additional $200 billion worth of Chinese goods, which will come into effect next month after a public comment period ends on Wednesday, 5 Sept. 2018.

Shares of exporters such as automakers and tech companies were lower, due to yen appreciation against greenback. Among major exporters, Panasonic fell almost 1%, while Canon and Mitsubishi Electric fell in a range of 0.3% to 0.7%. Toyota Motor was down almost 1% and Honda Motor fell more than 1%.

ECONOMIC NEWS: The Ministry of Economy, Trade and Industry said in Friday's preliminary reading that industrial production in Japan dipped a seasonally adjusted 0.1% on month in July, following the 1.8% drop in June. The ministry also said in its preliminary report that the seasonally adjusted index of output at factories and mines stood at 102.4 against the base of 100 for 2010 and changed its assessment of output saying it is "picking up slowly but some weakness can be seen." This is compared to the ministry's previous assessment that output was "picking up slowly." The index of industrial shipments in July fell 1.9% to 99.9. Inventories, meanwhile, were down 0.2% to 111.2 in the recording period, the ministry said. Manufacturers surveyed by the ministry said that looking ahead they expect factory output to rise 5.6% in August and 0.5% in September.

The unemployment rate in Japan came in at a seasonally adjusted 2.5% in July, unchanged from the June reading, while the jobs-to-applicants ratio rose to 1.63 jobs per applicant from 1.62 seen in June, posting the highest level since January 1974, separate data showed.

CURRENCY NEWS: Japanese yen appreciated against greenback. The dollar was quoted at 111.02-03 yen compared with 110.95-111.05 yen in New York and 111.61-62 yen on Thursday in Tokyo. The euro, meanwhile, fetched 129.50-51 yen against 129.48-58 yen in New York and 130.60-64 yen in late Thursday afternoon trade in Tokyo.

OFFSHORE MARKET NEWS, US stock market closed down on Thursday on concerns about the U.S.-China trade war, upstaged optimism that the United States and Canada could clinch a new North American Free Trade Agreement (NAFTA). The Dow Jones Industrial Average slid 137.65 points or 0.5% to 25,986.92, the Nasdaq fell 21.32 points or 0.3% to 8,088.36 and the S&P 500 dropped 12.91 points or 0.4% to 2,901.13.

The major European stock markets ended lower on Thursday. The U.K.'s FTSE 100 Index fell by 0.6%. The German DAX Index and the French CAC 40 Index dropped by 0.5% and 0.4%, respectively.

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