The Japanese stock market is trading sharply lower on Tuesday, reversing the gains in the previous two sessions, despite the broadly positive cues from Wall Street overnight, with the Nikkei 225 falling to near the 66,050 level, with weakness in automakers, exporters and technology stocks.
The benchmark Nikkei 225 Index is down 880.20 points or 1.32 percent at 66,054.13, after hitting a low of 65,970.86 earlier. Japanese shares ended significantly higher on Monday.
Market heavyweight SoftBank Group is edging up 0.4 percent, while Uniqlo operator Fast Retailing is losing almost 1 percent. Among automakers, Honda is losing more than 1 percent and Toyota is declining more than 2 percent.
In the tech space, Advantest, Screen Holdings and Tokyo Electron are all losing almost 1 percent each.
In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are edging down 0.1 to 0.3 percent each, while Mizuho Financial is edging up 0.4 percent.
The major exporters are mostly lower. Mitsubishi Electric is losing more than 2 percent, Panasonic is slipping almost 2 percent and Canon is down almost 1 percent, while Sony is gaining more than 1 percent.
Among the other major losers, Nippon Electric Glass is tumbling almost 11 percent, Taiyo Yuden is sliding more than 7 percent and Yaskawa Electric is slipping almost 7 percent, while Mitsui Kinzoku and Kawasaki Heavy Industries are declining more than 6 percent each. Fuji Electric, Shin-Etsu Chemical, Sumco and Sumitomo Pharma are losing almost 6 percent each, while Toto, Fanuc, Alps Alpine, Resonac Holdings, Mitsubishi Heavy Industries and Sumitomo Heavy Industries are down more than 5 percent each.
Conversely, Inpex and Kikkoman are advancing more than 4 percent each, while M3 and Isetan Mitsukoshi are gaining more than 3 percent each. Konami Group and Shiseido are adding almost 3 percent each.
In economic news, the monetary base in Japan was down 12.2 percent on year in May, the Bank of Japan said on Tuesday - coming in at 575.763 trillion yen. That missed expectations for a decline of 9.5 percent following the 11.3 percent drop in April.
Banknotes in circulation fell an annual 1.7 percent, while coins in circulation dropped 1.1 percent. Current account balances tumbled 14.7 percent on year, including a 12.7 drop among reserve balances.
The adjusted monetary base sank 13.3 percent on year to 567.785 trillion yen after slipping 5.6 percent in the previous month.
In the currency market, the U.S. dollar is trading in the higher 159 yen-range on Tuesday.
On Wall Street, stocks continued to show a lack of conviction during trading on Monday but once again managed to end the day mostly higher, following the relatively lackluster performance seen during last Friday's sessions.
The major averages ended the day off their best levels but still at new record closing highs. The tech-heavy Nasdaq climbed 114.19 points or 0.4 percent to 27,086.81, the S&P 500 rose 19.90 points or 0.3 percent to 7,599.96 and the Dow inched up 46.42 points or 0.1 percent to 51,078.88.
Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.7 percent, the French CAC 40 Index declined by 0.5 percent and the German DAX Index decreased by 0.4 percent.
Crude oil prices skyrocketed Monday on reports the U.S. and Iran exchanging attacks while the U.S. is yet to endorse a negotiated settlement to end the war. West Texas Intermediate crude for July delivery was up $4.64 or 5.31 percent at $92.00 per barrel.
However, crude oil prices pulled back off their highs after President Donald Trump said talks with Iran are continuing at a "rapid pace," while positive communications with Israeli Prime Minister Benjamin Netanyahu and Hezbollah also spurred hopes for an end to the war.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.