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Japanese Market Little Changed

The Japanese stock market is little changed on Wednesday despite the positive cues overnight from Wall Street, amid lingering worries about the continued spike in new coronavirus cases in several U.S. states and across the world. Data showing that business sentiment among large Japanese manufacturers fell to an eleven-year low also dampened sentiment.

The benchmark Nikkei 225 Index is edging up 4.51 points or 0.02 percent to 22,292.65, after rising to a high of 22,360.31 earlier. Japanese shares closed higher on Tuesday.

Market heavyweight SoftBank Group is advancing more than 2 percent, while Fast Retailing is down 0.2 percent.

In the financial sector, Mitsubishi UFJ is declining 0.7 percent and Sumitomo Mitsui Financial Group is down 0.1 percent.

The major exporters are lower despite a weaker yen. Canon is declining more than 1 percent, while Panasonic and Sony are lower by 0.6 percent each and Mitsubishi Electric is down 0.5 percent.

In the tech space, Tokyo Electron is rising more than 3 percent and Advantest is higher by more than 2 percent. Among automakers, Honda is declining more than 1 percent and Toyota is down almost 1 percent.

In the oil sector, Japan Petroleum and Inpex are lower by 0.6 percent each after crude oil prices declined overnight.

Among the major gainers, Sky Perfect JSAT Holdings is gaining more than 5 percent, Rakuten is rising almost 3 percent and Fujikura is higher by more than 2 percent.

On the flip side, Mitsui Fudosan, Suzuki Motor and Kikkoman Corp. are all losing almost 3 percent each.

In economic news, the Bank of Japan's quarterly Tankan Survey on business sentiment showed that large manufacturing in Japan weakened sharply in the second quarter of 2020, with a diffusion index score of -34. That missed forecasts for a reading of -31 as expectations were very soft because of the global Covid-19 pandemic. It was down from a score of -8 three months ago.

The outlook came in at -27, also missing expectations for -24 following the -11 score in the previous quarter.

The latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in June, albeit at a slower pace, with a manufacturing PMI score of 40.1. That's up from 38.4 in May, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the upper 107 yen-range on Wednesday.

On Wall Street, stocks capped off one of the best quarters for the markets in decades, with the Dow soaring by 17.8 percent for its biggest quarterly gain since 1987. Traders continued to express optimism about the economic outlook despite the continued spike in new coronavirus cases across several states. Adding to the positive sentiment, the Conference Board released a report showing a bigger than expected improvement in consumer confidence in the month of June.

The Dow jumped 217.08 points or 0.9 percent to 25,812.88, the Nasdaq spiked 184.61 points or 1.9 percent to 10,058.77 and the S&P 500 surged up 47.05 points or 1.5 percent to 3,100.29.

Meanwhile, the major European markets turned in a mixed performance on the day. The German DAX Index rose by 0.6 percent, while the French CAC 40 Index fell by 0.2 percent and the U.K.'s FTSE 100 Index slumped by 0.9 percent.

Crude oil prices drifted lower on Tuesday as worries about the outlook for energy demand persisted due to a continued surge in new coronavirus cases across the world. WTI crude for August declined $0.43 or 1.1 percent at $39.27 a barrel.

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