Japanese Market Sharply Higher

(RTTNews) - The Japanese stock market is trading sharply higher on Monday, extending the gains in the previous two sessions, despite the broadly negative cues from Wall Street on Friday, with the Nikkei 225 surging more than 700 points to well above the 43,700 level, with gains across most sectors amid upbeat domestic GDP figures, led by index heavyweights and technology stocks. Financial stocks were the only weak spot.

Japanese Prime Minister Shigeru Ishiba announced over the weekend that he will step down amid intensifying rifts within the ruling party.

The benchmark Nikkei 225 Index is up 723.86 points or 1.68 percent at 43,742.61, after touching a high of 43,835.37 earlier. Japanese shares ended significantly higher on Friday.

Market heavyweight SoftBank Group is gaining almost 3 percent and Uniqlo operator Fast Retailing is adding almost 3 percent. Among automakers, Honda and Toyota are flat.

In the tech space, Advantest is advancing almost 4 percent, Tokyo Electron is gaining more than 2 percent and Screen Holdings is adding more than 3 percent.

In the banking sector, Sumitomo Mitsui Financial is losing almost 1 percent, while Mizuho Financial and Mitsubishi UFJ Financial are edging down 0.3 percent each.

The major exporters are mostly higher. Panasonic and Mitsubishi Electric are edging up 0.3 to 0.4 percent each, while Sony is gaining more than 3 percent and Canon is adding almost 1 percent. Among the other major gainers, Socionext is jumping almost 7 percent and Mazda Motor is surging more than 6 percent, while Recruit Holdings, Mitsubishi Heavy Industries, Sumitomo Realty & Development and IHI are gaining almost 4 percent each. Renesas Electronics, Daiwa Securities, J. Front Retailing, Mitsubishi Estate, Lasertec, Fanuc and Mitsui Fudosan are all adding more than 3 percent each.

Conversely, there are no other major losers.

In economic news, Japan's gross domestic product climbed a seasonally adjusted 0.5 percent on quarter in the second quarter of 2025, the Cabinet Office said on Monday. That beat expectations for an increase of 0.3 percent, which would have been unchanged from the previous reading. On an annualized basis, GDP rallied 2.2 percent - handily beating forecasts for an increase of 1.0 percent, which again would have been unchanged.

GDP capital expenditure was up 0.6 percent on quarter, missing expectations for an increase of 1.3 percent. External demand was up 0.3 percent on quarter and private consumption rose 0.4 percent on quarter.

Meanwhile, Japan posted a current account surplus of 2.684 trillion yen in July, the Ministry of Finance said on Monday. That was well shy of expectations for a surplus of 2.266 trillion yen following the 1.348 trillion yen surplus in June. Exports were down 4.9 percent on year at 9.006 trillion yen and imports sank an annual 7.4 percent to 9.195 trillion yen for a trade deficit of 189 billion yen. The capital account saw a deficit of 16.3 billion yen, while the financial account posted a surplus of 2.028 trillion yen.

Overall bank lending in Japan was up 3.6 percent on year in August, the Bank of Japan said on Monday - coming in at 646.058 trillion yen. That topped forecasts for an increase of 3.2 percent, which would have been unchanged from the July reading. Excluding trusts, lending jumped an annual 3.9 percent to 567.570 trillion yen, while lending from trusts rose 1.3 percent on year for the third straight month, this time at 78.488 trillion yen.

In the currency market, the U.S. dollar is trading in the lower 148 yen-range on Monday.

On Wall Street, stocks came under pressure in early trading on Friday after failing to sustain an initial move to the upside. The major averages pulled back into negative after reaching new record intraday highs.

The major averages climbed well off their worst levels as the day progressed but still closed in negative territory. The Dow slid 220.43 points or 0.5 percent to 45,400.86, the S&P 500 fell 20.58 points or 0.3 percent to 6,481.50 and the Nasdaq edged down 7.31 points or less than a tenth of a percent to 21,700.39.

The major European markets also all moved to the downside on the day. While the German DAX Index slid by 0.7 percent, the French CAC 40 Index fell by 0.3 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.

Crude oil prices moved sharply lower on Friday as oversupply concerns grew stronger ahead of OPEC's Sunday meeting, where the group did as expected and boosted output. West Texas Intermediate crude for October delivery dropped $1.64 or 2.58 percent to $61.84 per barrel.