Japanese Market Significantly Higher

The Japanese stock market is significantly higher on Monday after initially tracking the broadly negative cues from Wall Street on Friday, recouping some of the losses in the previous session, with the Nikkei 225 moving above the 26,100 level, after the Japanese Finance Minister Shunichi Suzuki confirmed his position to take decisive actions in the currency market if the yen surge continues.

The benchmark Nikkei 225 Index is up 194.14 or 0.75 percent at 26,131.35, after touching a high of 26,151.96 and a low of 25,621.96 earlier. Japanese shares ended sharply lower on Friday.

Market heavyweight SoftBank Group is edging up 0.4 percent, while Uniqlo operator Fast Retailing is losing almost 2 percent. Among automakers, Honda is gaining almost 2 percent and Toyota is adding almost 3 percent.

In the tech space, Advantest and Tokyo Electron are gaining more than 4 percent each, while Screen Holdings is surging almost 6 percent. In the banking sector, Sumitomo Mitsui Financial is flat, while Mizuho Financial is edging down 0.5 percent and Mitsubishi UFJ Financial is slipping more than 1 percent.

The major exporters are strong, with Panasonic gaining almost 1 percent and Sony advancing almost 2 percent, while Canon and Mitsubishi Electric are edging up 0.2 to 0.4 percent each.

Among the other major gainers, Kawasaki Kisen Kaisha is surging more than 5 percent and Nippon Yusen K.K. is gaining more than 4 percent, while Mitsui O.S.K. Lines, Shin-Etsu Chemical and Sumco are adding almost 4 percent each. Denso, Taiyo Yuden and Yaskawa Electric are up almost 3 percent each.

Conversely, Seven & I Holdings and Kansai Electric Power are plunging almost 5 percent each, while Maruha Nichiro, Isetan Mitsukoshi Holdings, Tokyo Electric Power, Chubu Electric Power, Shiseido, Nippon Paper Industries, Matsui Securities and Central Japan Railway are losing more than 3 percent each. Sapporo Holdings, Takashimaya, Kao, NH Foods and Tobu Railway are slipping almost 3 percent each.

In economic news, the manufacturing sector in Japan continued to expand in September, albeit at a slower pace, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 50.8. That's down from 51.5, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Subsequently, Japanese manufacturers cut their production volumes at the end of the third quarter for the third successive month. The decrease was the fastest in a year, but modest overall.

Large manufacturing in Japan weakened in the third quarter of 2022, the Bank of Japan's quarterly Tankan Survey of business sentiment showed on Monday with a diffusion index score of +8. That missed forecasts for a reading of +11 and was down from +9 three months ago. The outlook came in at +9, also missing expectations for +11 and down from +10 in the previous quarter. The large non-manufacturers index came in at +14, beating forecasts for +13, which would have been unchanged. The outlook was +11, missing forecasts for +15 and down from +13 three months earlier.

In the currency market, the U.S. dollar is trading in the higher 144 yen-range on Monday.

On Wall Street, stocks fluctuated in morning trading on Friday before once again coming under pressure over the course of the afternoon. The major averages extended the sharp pullback seen on Thursday, ending the session at their lowest closing levels since late 2020.

The major averages saw further downside going into the close, ending the session just off their worst levels of the day. The Dow plunged 500.10 points or 1.7 percent to 28,725.51, the Nasdaq tumbled 161.89 points or 1.5 percent to 10,575.62 and the S&P 500 slumped 54.85 points or 1.5 percent to 3,585.62.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index jumped by 1.2 percent and the French CAC 40 Index surged by 1.5 percent.

Crude oil futures failed to hold early gains and settled lower on Friday as worries about the outlook for energy demand weighed on prices. West Texas Intermediate Crude oil futures for November ended lower by $1.74 or 2.1 percent at $79.49 a barrel.

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