The Japanese market ended Wednesday's trading session sharply lower as the local currency yen strengthened against the US dollar to a new 15-year high. Weak closing on Wall Street in the previous session amid fresh concerns about the health of the European banks also impacted market sentiment. Exporters, machinery stocks, banks and mining stocks led the decline as fresh concerns about the European debt resurfaced yet again. Weak trading across the markets in the neighborhood also impacted market sentiment.
The benchmark Nikkei 225 Index declined 201.40 points, or 2.18%, to 9,025.while the broader Topix index of all First Section issues was down 13.93 points, or 1.67% to 821.
On the economic front, a report released by the Cabinet Office revealed that core machinery orders jumped a seasonally adjusted 8.8% in July compared to the previous month. That was sharply higher than analyst expectations for a 2.0% monthly increase following the 1.6% gain in June. Government orders eased 1.3% on month, while overseas orders added 2.6% and agency orders fell 1.8%. Private sector orders collected 6.4 percent on month. The report further noted that, on an annual basis, core machinery orders surged 15.9% - again topping forecasts for an 8.1% gain after shedding 2.2% in the previous month.
A report released by the Ministry of Finance revealed that Japan posted a current account surplus of 1.6759 trillion yen in July, up 26.1% on year. That beat expectations for a surplus of 1.534 trillion yen after showing a surplus of 1.0471 trillion yen in June. The report further added that Imports rose 15.7% on year to 4.747 trillion yen, while exports added an annual 24.7% to 5.663 trillion yen. The trade surplus was 916.1 billion yen, up 110.0% on year.
Light sweet crude oil futures for October delivery ended at $73.89 a barrel in electronic trading, down $0.20 per barrel from previous close at $74.09 a barrel in New York on Tuesday.
All the 33 sectors in the index witnessed declines. Traders adopted a cautious approach and remained in the sidelines awaiting more cues on global economic recovery. The major decliners included stocks of consumer finance, glass and ceramics and securities apart from exporters.
In the U.S., stocks fell by sharp margins to open the Labor Day-shortened week on Tuesday, as profit taking following last week's gains drove the major averages down off of their best closing levels in three weeks. Nonetheless, the pullback came on low volume, with many traders staying away from their desks following the three-day weekend. The major averages saw some late-day volatility, ending near their session lows. The Dow fell by 107.24 points or 1% to end at 10,341, the Nasdaq declined by 24.86 points or 1.1% to 2,209 and the S&P 500 lost 12.67 points or 1.1% to close at 1,092.
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