Rally May Stall For Japan Stock Market

(RTTNews) - The Japanese stock market has tracked to the upside in four consecutive sessions, climbing more than 5,100 points or 8.1 percent in that span. Now at a record closing high, the Nikkei 225 sits just above the 69,400-point plateau although it may run out of steam on Wednesday.

The global forecast for the Asian markets is soft, with profit taking on the docket after a few days of solid gains. The European markets were up and the U.S. bourses were mostly lower and the Asian markets are expected to follow the latter lead.

The Nikkei finished slightly higher on Tuesday as gains from the technology stocks were capped by weakness from the financial shares and automobile producers.

For the day, the index rose 87.00 points or 0.13 percent to finish at 69,404.50 after trading between 69,095.67 and 70,020.68.

Among the actives, Nissan Motor slumped 1.12 percent, while Mazda Motor retreated 1.52 percent, Toyota Motor tumbled 1.89 percent, Honda Motor declined 1.30 percent, Softbank Group shed 0.52 percent, Mitsubishi UFJ Financial fell 0.43 percent, Mizuho Financial lost 0.46 percent, Sumitomo Mitsui Financial contracted 1.69 percent, Mitsubishi Electric rose 0.24 percent, Sony Group dropped 1.36 percent, Panasonic Holdings jumped 1.72 percent and Hitachi added 0.21 percent.

The lead from Wall Street is mixed to lower as the major averages opened higher on Tuesday but only the Dow was able to hold on to its gains as the markets finished mixed.

The Dow rallied 328.64 points or 0.64 percent to finish at a record 51,999.67, while the NASDAQ dropped 307.60 points or 1.15 percent to end at 26,376.34 and the S&P 500 sank 42.94 points or 0.57 percent to close at 7,511.35.

The pullback by the NASDAQ and the S&P 500 reflected profit taking following recent strength in the markets. Optimism about an end to the monthslong U.S.-Iran contributed to the recent recovery, but some traders cashed in on gains as they wait for the peace deal to be finalized.

The mixed performance on Wall Street also came as traders looked ahead to the Federal Reserve's monetary policy announcement later today. The Fed is widely expected to leave interest rates unchanged, but the accompanying statement and new Chair Kevin Warsh's post-meeting comments could impact the outlook for rates.

On the inflation front, a report released by the Labor Department showed import prices in the U.S. shot up by much more than expected in the month of May.

Crude oil prices plummeted on Tuesday as transit disruption concerns faded due to the anticipated U.S.-Iran deal. West Texas Intermediate crude for July delivery was down $4.90 or 6.07 percent at $75.85 per barrel.

Closer to home, Japan will release April figures for core machinery orders and May numbers for imports, exports and trade balance this morning.

Core machinery orders are expected to rise 2.1 percent on month and 9.3 percent on year after sinking 9.4 percent on month and climbing 5.9 percent on year in March.

Imports are expected to jump 12.8 percent on year, up from 9.7 percent in April. Exports are called higher by an annual 16.2 percent, up from 14.8 percent in the previous month. The trade deficit is pegged at 564.6 billion yen following the 301.9 billion surplus a month earlier.