The Japanese stock market is trading notably lower on Friday with the overnight fall on Wall Street and an unexpected decline in industrial production hurting sentiment to a significant extent.
Amid a slew of economic reports, investors are seen indulging in some heavy selling almost across the board. The benchmark Nikkei 225 index, which opened notably lower, is currently down 145.8 points or 1.5% at 9,550.2.
Electric power, manufacturing, oil and mining stocks are trading notably lower. Bank stocks are also trading weak. Automobile, marine transport, services and insurance stocks are exhibiting a mixed trend.
Nissan Motor Co. shares are up for the sixth straight trading day on reports the automaker has booked a 106.6 billion yen group net profit in the quarter through June.
On the economic front, data released by the Ministry of Internal Affairs and Communications showed that the unemployment rate in Japan moved up to a seasonally adjusted 5.3% in June, standing at 3.44 million persons. That was down 40,000 or 1.1% on year. The June figure was slightly higher than analyst expectations for a 5.2% increase, which also would have matched the figure in May.
According to another report from the same ministry, core consumer prices in Japan fell for the 16th consecutive month and were down 1% on year in June. Analysts had expected a 1.1% decline following the 1.2% fall in May. Overall inflation was down 0.7% on year after easing 0.9% in May. It was flat on month after adding 0.1% in May. Core inflation in Tokyo was down 1.3% on year versus expectations for a 1.4% decline after shedding 1.3% in the previous month.
Meanwhile, industrial production in Japan declined 1.5% in June compared to the previous month, the Ministry of Economy, Trade and Industry said in a preliminary report on Friday. That was sharply lower than analyst expectations for a 0.2% increase following the 0.1% monthly gain in May.
On an annual basis, industrial production climbed 17%, again missing forecasts for an 18.9% increase after surging 20.4% in the previous month. For the second quarter of 2010, industrial production was up 1.4% on quarter.
Japan's statistics bureau reported that household spending in Japan increased in June 2010 by 0.5% from one year earlier. The bureau said the average monthly income per household was up 5.6% from the year before and the average consumption expenditures per household were up 0.3% from the preceding year.
In the currency market, the U.S. dollar traded at the upper 86 yen level in early deals in Tokyo. The yen is currently trading at 86.58 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia, South Korea, Shanghai and Taiwan are down with notable losses. Singapore is down marginally while Malaysia is trading flat. The New Zealand market is up with modest gains. Markets across the region ended on a mixed note on Thursday.
On Wall Street, stocks ended moderately lower on Thursday, as mixed indications from the Federal Reserve, the labor market and the earnings front prompted some selling in the equity markets.
The Dow ended lower by 30.7 points or 0.3% at 10,467.2, the Nasdaq declined by 12.9 points or 0.6% to 2,251.7 and the S&P 500 slid by 4.6 points or 0.4% to 1,101.5.
Major European markets ended in the red on Thursday following a late-day sell off. The U.K.'s FTSE 100 index edged lower by 0.1%, while the French CAC index and the German DAX index lost 0.5% and 0.7% respectively.
Oil prices rebounded strongly from a weekly low and closed higher on Thursday. A weaker dollar and a decline in initial jobless claims contributed to the rise. Light, sweet crude for September delivery ended up US$1.37 at US$78.36 a barrel on the New York Mercantile Exchange, recording its first gain in five sessions.
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