February 23, 2024

Japan Leading Losses in Asian Markets

The first day of the second half of 2022 saw Asia-Pacific markets reverse the gains they had made earlier, as investors were digesting the results of a private survey in China, which showed positive factory activity numbers.

Fall in markets

The Japanese Nikkei 225 index recorded a decline of 1.73% to end the day at 25,935.62, while a 1.38% decline was also recorded in the Topix index which saw it close at 1,845.04. There was a 4% dip in the shares of Fast Retailing.

The quarterly survey of the Bank of Japan on business sentiment showed that sentiment had worsened during the April to June period at the large manufacturers in Japan. Where large manufacturers are concerned, the headline index had come down to 9, which was a decline from the readings of the previous quarter, which had put it at 14.

Market analysts said that there were lot of headwinds for manufacturers at this time, which included uncertain supply conditions and increasing input costs. A lot of this has to do with the COVID-19 curbs that had been imposed in China and the war between Russia and Ukraine.

The Kospi index in South Korea also reversed its course to decline by 1.17% and reach 2,305.42, while a 2.14% drop was seen in the Kosdaq and this brought it to 729.48. A 0.43% decline was recorded in Australia’s ASP/S&P 200 index. Likewise, a 1.03% fall was also seen in the MSCI’s index of Asia-Pacific shares, excluding Japan.

China markets

Even though the manufacturing sector had some positive data to report, the mainland China markets remained down. There was a 0.32% fall in the Shanghai Composite, while a 0.28% drop was seen in the Shenzhen Component. On Friday, the Purchasing Managers’ Index (PMI) for Caixin/Markit manufacturing was released for the month of June.

It stood at 51.7, with the 50 level meant to distinguish between expansion and contraction. The number had stood at 48.1 in the previous month. It had been expected to be 50.1. Hong Kong markets had been closed for the day, as the city was celebrating the 25th anniversary of its handover to China from the UK. Xi Jinping, the Chinese president arrived in the city and presided over its new chief executive. This is the first visit of the Chinese president after COVID.

Currencies and oil

The US dollar index, which measures the currency against its major peers, had reached 105.081. Earlier this week, the Japanese yen had fallen against the US dollar to reach 137, but it strengthened and was trading at a value of 135.07. As for the Australian dollar, it was last trading at $0.6814.

Oil futures were mostly trading flat for the day, having given up their gains earlier. There was a 0.2% loss in US crude, which brought them to $105.55 a barrel. As for Brent crude futures, they were priced at 109.05 a barrel, which is just above the flatline. Overnight trading in the US markets saw them close lower in the second quarter.

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