Japanese Market Modestly Lower

The Japanese stock market is modestly lower on Tuesday, giving up some of the gains in the previous two sessions, with the Nikkei 225 staying below the 26,900 level, despite the broadly positive cues from Wall Street overnight, with data showing Japan's manufacturing activity expanded at the slowest pace in three months. Supply chain concerns also remain due to parts shortages amid the COVID lockdowns in China.

The benchmark Nikkei 225 Index is down 113.97 points or 0.42 percent at 26,887.55, after hitting a low of 26,809.95 earlier. Japanese shares ended significantly higher on Monday.

Market heavyweight SoftBank Group is losing more than 2 percent and Uniqlo operator Fast Retailing is down almost 1 percent. Among automakers, Honda is edging down 0.5 percent, while Toyota is flat.

In the tech space, Advantest and Screen Holdings are losing almost 1 percent each, while Tokyo Electron is edging up 0.1 percent. In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent, Mitsubishi UFJ Financial is adding more than 1 percent each and Mizuho Financial is edging up 0.2 percent.

The major exporters are higher, with Sony and Canon gaining almost 1 percent each, while Panasonic and Mitsubishi Electric are edging up 0.4 percent each.

Among the other major losers, Recruit Holdings is losing more than 5 percent, CyberAgent is slipping more than 4 percent and Z Holdings is declining more than 3 percent.

Conversely, Isetan Mitsui O.S.K. Lines is gaining more than 3 percent, while Isuzu Motors, Mitsui E&S Holdings and NTN are adding almost 3 percent each.

In economic news, the manufacturing sector in Japan continued to expand in May, albeit at a slower pace, the latest survey from Jibun Bank showed on Tuesday with a manufacturing PMI score of 53.2. That's down from 53.5 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI improved to 51.7 in May from 50.7 in April, while the composite PMI rose to 51.4 from 51.1.

In the currency market, the U.S. dollar is trading in the higher 127 yen-range on Tuesday.

On Wall Street, stocks showed a strong move to the upside during trading on Monday following the extreme volatility seen over the past few sessions. The major averages advanced early in the session and managed to remain firmly positive throughout the day.

The major averages held on to their strong gains going into the close. The Dow surged 618.34 points or 2 percent to 31,880.24, the Nasdaq jumped 180.66 points or 1.6 percent to 11,535.27 and the S&P 500 shot up 72.39 points or 1.9 percent to 3,973.75.

The major European markets all also moved to the upside on the day. While the U.K.'s FTSE 100 Index surged by 1.7 percent, the German DAX Index and the French CAC 40 Index shot up by 1.4 percent and 1.2 percent, respectively.

Crude oil futures pared early gains and settled flat on Monday. Oil prices climbed higher earlier in the day amid hopes of increased demand from China, while a weaker dollar also offered support. West Texas Intermediate crude oil futures for July ended at $110.29 a barrel, up a penny from Friday's close of $110.28 a barrel.

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