Japanese Market Modestly Higher

(RTTNews) - The Japanese stock market is trading modestly higher on Monday, adding to the gains in the previous session. The benchmark S&P/ASX 200 is moving above the 39,700 level, despite the broadly negative cues from Wall Street on Friday, as traders reacted to upbeat domestic business sentiment readings for the second quarter.

The benchmark Nikkei 225 Index is up 127.38 or 0.32 percent at 39,710.46, after touching a high of 39,942.69 earlier. Japanese shares ended notably higher on Friday.

Market heavyweight SoftBank Group is gaining more than 1 percent and Uniqlo operator Fast Retailing is edging up 0.4 percent. Among automakers, Honda is gaining more than 2 percent, while Toyota is declining almost 1 percent.

In the tech space, Screen Holdings is losing almost 1 percent and Advantest is edging down 0.2 percent, while Tokyo Electron is edging up 0.1 percent.

In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are edging up 0.1 to 0.4 percent each, while Mizuho Financial is gaining almost 1 percent.

The major exporters are higher. Canon and Mitsubishi Electric are gaining more than 1 percent each, while Sony is adding almost 1 percent and Panasonic is edging up 0.3 percent.

Among other major gainers, J. Front Retailing skyrocketing almost 13 percent and Takashimaya is soaring almost 8 percent, while Kawasaki Kisen Kaisha and Trend Micro are gaining more than 4 percent each. Amada is adding almost 4 percent, while Dai-ichi Life, Japan Steel Works, Isetan Mitsukoshi, OKUMA, T&D Holdings and Mitsubishi Corp. are advancing more than 3 percent each. Yokogawa Electric, Nippon Telegraph & Telephone, Mitsui O.S.K. Lines and MS&AD Insurance Group are up almost 3 percent each.

Conversely, Sumitomo Pharma is declining more than 3 percent, while LY Corp., Lasertec, Resonac Holdings, Chugai Pharmaceutical and Terumo are losing almost 3 percent each.

In economic news, large manufacturing in Japan strengthened in the second quarter of 2024, the Bank of Japan's quarterly Tankan Survey of business sentiment showed on Monday with a diffusion index score of +13. That beat forecasts for a reading of +10 and was up from +11 three months ago. The outlook came in at +14, matching expectations and up from +13 in the previous quarter.

The large non-manufacturers index came in at +33, beating forecasts for +27 but down from +34. The outlook was +27, down from +44 three months earlier. The medium manufacturing index was at +8 with an outlook of +7, while the medium non-manufacturing index was at +22 with an outlook of +16. The small manufacturing index was at -1, while the small non-manufacturing index was at +12.

The latest survey from Jibun Bank revealed that the manufacturing sector in Japan was flat in June, with a manufacturing PMI score of 50.0. That's down from 50.4 in May and it's now right on the line that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the higher 160 yen-range on Monday.

On Wall Street, stock moved mostly higher in early trading on Friday but showed a significant downturn over the course of the session. The major averages pulled back well off their early highs and into negative territory.

After reaching record intraday highs, the Nasdaq slid 126.08 points or 0.7 percent to 17,732.60 and the S&P 500 fell 22.39 points or 0.4 percent to 5,460.48. The narrower Dow posted a more modest loss, edging down 45.20 points or 0.1 percent to 39,118.86.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is down by 0.5 percent, the U.K.'s FTSE 100 Index is up by 0.2 percent and the German DAX Index is up by 0.5 percent.

Crude oil prices showed a modest move to the downside on Friday, coming down from a two-month high on profit taking. West Texas Intermediate crude for August delivery dipped $0.20 or 0.2 percent to $81.54 a barrel.