Japanese Market Sharply Lower; Down 2 Percent

The Japanese stock market is sharply lower on Monday, giving up some of the gains in the previous session, with the Nikkei 225 staying above the 26,400 level, following the broadly negative cues from Wall Street on Friday, as traders brace for further global monetary policy tightening to tame persistent inflation.

The benchmark Nikkei 225 Index is down 558.74 points or 2.07 percent at 26,444.82, after hitting a low of 26,343.29 earlier. Japanese shares ended modestly higher on Friday.

Market heavyweight SoftBank Group is losing almost 3 percent and Uniqlo operator Fast Retailing is slipping more than 5 percent. Among automakers, Honda is losing more than 1 percent, while Toyota is down almost 1 percent.

In the tech space, Advantest is declining almost 1 percent, while Tokyo Electron and Screen Holdings are losing more than 2 percent each. In the banking sector, Sumitomo Mitsui Financial is losing almost 1 percent and Mitsubishi UFJ Financial is down more than 1 percent, while Mizuho Financial is gaining almost 1 percent.

The major exporters are weak, with Sony losing almost 2 percent, Mitsubishi Electric slipping almost 1 percent and Panasonic edging down 0.2 percent. Canon is flat.

Among the other major losers, JFE Holdings is plunging more than 9 percent, while Konami Holdings, Toho Zinc, Nippon Steel and Pacific Metals are slipping more than 6 percent each. Marubeni and Kobe Steel are losing almost 5 percent each, while Sumitomo Metal Mining, Tokai Carbon, Komatsu and Showa Denko K.K. are sliding more than 4 percent each. Keio, Yaskawa Electric and Dowa Holdings are declining almost 4 percent each.

Conversely, there are no major gainers.

In economic news, Members of the Bank of Japan's Monetary Policy Board said that the country's economy continues to show improvement, minutes from the central bank's meeting on March 17 and 18 revealed on Monday. The persistence of COVID-19 and the Russian invasion of Ukraine provide significant uncertainties moving forward for the global economy, the minutes said, and are limiting the upside in Japan. The bank also noted that inflation is expected to continue to rise in the coming months, pushed higher by the recent spike in energy prices.

At the meeting, the bank voted to maintain its monetary policy stimulus, holding the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank. The bank will also continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

In the currency market, the U.S. dollar is trading in the higher 130 yen-range on Monday.

On Wall Street, stocks fluctuated wildly over the course of the trading day on Friday before eventually ending the session mostly lower. With the drop on the day, the major averages extended the sell-off seen during trading on Thursday.

The tech-heavy Nasdaq tumbled 173.03 points or 1.4 percent to 12,144.66, once again hitting its lowest closing level in well over a year. The S&P 500 slid 23.53 points or 0.6 percent to a nearly one-year closing low of 4,123.34 and the Dow fell 98.60 points or 0.3 percent to a two-month closing low of 32,899.37.

The major European markets also moved to the downside on the day. While the French CAC 40 Index tumbled 1.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index slumped by 1.6 percent and 1.5 percent, respectively.

Crude oil prices closed higher on Friday, and posted a weekly gain as well, amid worries about supply following the European Union's decision proposing some of its toughest measures yet against Russia. West Texas Intermediate Crude oil futures for June ended higher by $1.51 or 1.4 percent at $109.77 a barrel. WTI crude futures gained nearly 5 percent in the week.

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