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Japanese Market Edges Higher In Choppy Trade

The Japanese stock market, which resumed trading on Tuesday after a holiday in the previous session, is edging higher in choppy trading after a weak start following the negative cues overnight from Wall Street.

Investors turned cautious after a new coronavirus variant was detected in four people who arrived in Japan from Brazil and as reports indicated the Japanese government plans to expand a state of emergency to the western prefectures of Osaka, Kyoto and Hyogo.

The benchmark Nikkei 225 Index is adding 17.37 points or 0.06 percent to 28,156.40, after touching a low of 27,899.45 in early trades. The Japanese market was closed on Monday for a holiday.

Market heavyweight SoftBank Group is down 0.7 percent, while Fast Retailing is adding 0.3 percent. In the tech space, Tokyo Electron is advancing more than 1 percent, while Advantest are is declining more than 1 percent.

The major exporters are mostly lower despite a weaker yen. Canon is declining 1 percent, while Sony is lower by 0.6 percent and Panasonic is down 0.2 percent. Mitsubishi Electric is edging up 0.1 percent.

Among automakers, Honda is lower by 0.6 percent and Toyota is down 0.3 percent. In the banking sector, Mitsubishi UFJ Financial is rising almost 2 percent and Sumitomo Mitsui Financial is adding 0.7 percent.

Among the other major gainers, Chugai Pharmaceutical is climbing almost 10 percent after tocilizumab, an arthritis drug developed by the company and Osaka University, was found by the British government to be effective in treating patients with COVID-19.

Tokyo Electric and Fuji Electric are rising more than 5 percent each, while Takeda Pharmaceutical is higher by more than 4 percent.

Conversely, Oji Holdings is losing almost 4 percent, while Dain Nippon Printing and Japan Steel Works are declining almost 3 percent each.

In economic news, the Ministry of Finance said Japan posted a current account surplus of 1,878.4 billion yen in November on Tuesday. That exceeded expectations for a surplus of 1,551 billion yen and was down from 2,144.7 billion yen in October.

Exports were down 3.4 percent on year to 6.039 trillion yen, while imports sank an annual 13.6 percent to 5.423 trillion yen. The trade balance showed a surplus of 616.1 billion yen.

The Bank of Japan said the value of overall bank lending in Japan was up 6.2 percent on year in December, coming in at 577.639 trillion yen. That was unchanged from the November reading following a downward revision from 6.3 percent.

In the currency market, the U.S. dollar is trading in the lower 104 yen-range on Tuesday.

On Wall Street, stocks closed lower on Monday as investors stayed largely cautious, assessing valuations and taking some profits. Rising coronavirus cases across the world and concerns about developments in Washington also weighed on stocks. House Democrats are preparing to impeach Donald Trump even though the president has less than two weeks left in his term.

The Dow, which plunged nearly 270 points in early trades, ended down 89.28 points or 0.29 percent at 31,008.69. The S&P 500 slid 25.07 points or 0.66 percent to 3,799.61, while the Nasdaq settled at 13,036.43, losing 165.54 points or 1.25 percent.

The major European markets also ended notably lower on Monday. The U.K.'s FTSE 100 ended down 1.09 percent, Germany's DAX lost 0.8 percent and France's CAC 40 shed 0.78 percent.

Crude oil futures settled flat on Monday as rising coronavirus cases and tighter lockdown measures in several countries across the world raised concerns about outlook for energy demand. WTI crude for February settled at $52.25 a barrel, up $0.01 from the previous close.

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