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Japanese Market Significantly Lower

The Japanese stock market is significantly lower on Friday after opening in the green, extending the losses in the previous two sessions, with the benchmark Nikkei 225 staying just above the 26,200 level, following the broadly negative cues overnight from global markets, dragged by technology and energy stocks.

The benchmark Nikkei 225 Index is losing 184.41 points or 0.70 percent to 26,208.63, after hitting a low of 26,149.80 earlier. Japanese shares closed sharply lower on Thursday.

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

In the tech space, Advantest is losing almost 2 percent, Screen Holdings is declining more than 2 percent and Tokyo Electron is slipping more than 3 percent.

In the banking sector, Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Mizuho Financial are edging up 0.2 to 0.4 percent each.

Among major exporters, Panasonic is edging down 0.2 percent and Sony is declining more than 1 percent, while Mitsubishi Electric is adding almost 1 percent and Canon is gaining more than 1 percent.

Among the other major losers, Tokyo Gas is plunging 6.5 percent, Osaka Gas is losing almost 6 percent, Mitsui & Co. is slipping almost 5 percent and Mitsubishi is down more than 4 percent, while Inpex, JGC Holdings and Bridgestone are declining almost 3 percent each.

Conversely, Takashimaya is soaring almost 10 percent, while J. Front Retailing and Seiko Epson are gaining more than 3 percent each.

In economic news, the unemployment rate in Japan came in at a seasonally adjusted 2.6 percent in May, the Ministry of Internal Affairs and Communications said on Friday. That was higher than forecasts for 2.5 percent, which would have been unchanged from the April reading. The job-to-applicant ratio was 1.24, in line with forecasts and up from 1.23 in the previous month. The participation rate was 62.7 percent in May, up from 62.6 percent in April.

Meanwhile, overall consumer prices in Japan were up 2.3 percent on year in June, the Ministry of Internal Affairs and Communications said on Friday. That was in line with expectations and down from 2.4 percent in May. On a monthly basis, overall consumer prices were up a seasonally adjusted 0.1 percent. Core CPI, which strips out volatile food prices, was up 2.1 percent on year - in line with expectations and up from 1.9 percent in the previous month.

The manufacturing sector in June continued to expand in Japan, albeit at a slower pace, the latest survey from Jibun Bank showed on Friday with a manufacturing PMI score of 52.7.That's down from 53.3 in May although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Large manufacturing in Japan weakened in the second quarter of 2022, the Bank of Japan's quarterly Tankan Survey of business sentiment showed on Friday with a diffusion index score of +9. That missed forecasts for a reading of +13 and was down from +14 three months ago. The outlook came in at +10, missing expectations for +14 and up from +9 in the previous quarter. The large non-manufacturers index came in at +13, missing forecasts for +14 and up from +9 in the previous month. The outlook was +13, missing forecasts for +17 and up from +7 three months earlier.

In the currency market, the U.S. dollar is trading in the higher 135 yen-range on Friday.

On Wall Street, stocks fluctuated after an early sell-off on Thursday but maintained a negative bias throughout the session. The major averages all finished the day notably lower after ending Wednesday's trading narrowly mixed.

After falling nearly 600 points in early trading, the Dow regained some ground but still closed down 253.88 points or 0.8 percent at 30,775.43. The Nasdaq also tumbled 149.16 points or 1.3 percent to 11,028.74, while the S&P 500 slumped 33.45 points or 0.9 percent to 3,785.38.

The major European markets all also moved sharply lower on the day. While the U.K.'s FTSE 100 Index plunged 2 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.8 percent and 1.7 percent, respectively.

Crude oil prices moved sharply lower Thursday, extending the pullback seen in the previous session on lingering concerns about the outlook for demand amid the possibility of a recession. West Texas Intermediate for August delivery plunged $4.02 or 3.7 percent to $105.76 a barrel.

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