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Japanese Market Sharply Lower

The Japanese stock market is trading sharply lower on Friday, giving up the gains in the previous session, with the benchmark Nikkei 225 falling below the 27,400 level, following the broadly negative cues overnight from Wall Street, with weakness across most industry sectors, particularly technology stocks.

Traders remain concerned and cautious as daily new COVID-19 cases continues to hit new record levels for the third straight day, with new cases of the fast-spreading coronavirus omicron variant topping 46,000 on Thursday. Japan is set to put 16 of the 47 prefectures under a quasi-emergency from Friday.

The benchmark Nikkei 225 Index is losing 389.02 points or 1.40 percent to 27,383.91, after hitting a low of 27,129.61 earlier. Japanese shares closed significantly higher on Thursday.

Market heavyweight SoftBank Group and Uniqlo operator Fast Retailing are losing more than 1 percent each. Among automakers, Honda is edging up 0.3 percent, while Toyota is down almost 3 percent.

In the tech space, Advantest is losing almost 4 percent, while Screen Holdings and Tokyo Electron are plunging almost 6 percent each.

In the banking sector, Mizuho Financial and Sumitomo Mitsui Financial are losing more than 1 percent each, while Mitsubishi UFJ Financial is down almost 2 percent.

Among major exporters, Mitsubishi Electric is edging up 0.1 percent, while Panasonic is edging down 0.3 percent, Canon is down 1.5 percent and Sony is declining almost 3 percent.

Among the other major losers, Inpex is plunging almost 7 percent, while Denso, JTEKT, Isuzu Motors and Fujikura are losing almost 5 percent each. Mazda Motor, Showa Denko K.K., Ricoh and Hino Motors are declining more than 4 percent each, while Taiyo Yuden, CyberAgent and Tokai Carbon are slipping almost 4 percent each.

Conversely, Konami Holdings is gaining more than 4 percent.

In economic news, overall consumer prices in Japan were up 0.8 percent on year in December, the Ministry of Internal Affairs and Communications said on Friday. That was in line with expectations and up from 0.6 percent in November. On a seasonally adjusted monthly basis, overall inflation and core CPI both were up 0.1 percent. Core CPI, which excludes volatile food prices, was up an annual 0.5 percent, unchanged but shy of forecasts for 0.6 percent.

The Bank of Japan will also release the minutes from its monetary policy meeting on December 16 and 17. At the meeting, the BoJ decided to scale back its pandemic related funding measures, ending the additional purchases of CP and corporate bonds at the end of March 2022 as scheduled. The board decided to maintain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

In the currency market, the U.S. dollar is trading in the higher 113 yen-range on Friday.

On Wall Street, stocks were unable to hold on to early gains on Thursday, opening solidly higher but fading as the day progressed before ending firmly in negative territory for the third straight session.

For the day, the Dow plummeted 313.26 points or 0.89 percent to finish at 34,715.39, while the NASDAQ plunged 186.23 points or 1.30 percent to close at 14,154.02 and the S&P 500 sank 50.03 points or 1.10 percent to end at 4,482.73.

Meanwhile, the major European markets ended the day mixed. While the Germany's DAX gained 0.65 percent and France's CAC 40 gained 0.3 percent, the U.K.'s FTSE 100 edged down 0.06 percent.

Crude oil prices eased on Thursday, after having hit a seven-year high in the previous session on demand optimism and supply disruptions. West Texas Intermediate (WTI) crude was down $0.67 or 0.77 percent to $86.29 per barrel.

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