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▼ Japanese Stocks Retreat On Growth Worries; Techs Follow U.S. Peers Lower
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TOKYO - `Japanese stocks retreated on Friday, buffeted on the first trading session of 2019 as Apple Inc's earnings warning hit technology stocks and signs of slowdowns in the U.S. and Chinese economies soured broader sentiment.
The Nikkei share average ended the day down 2.26 percent at 19,561.96 after losing as much as 3.86 percent, as investors digested bearish news since the start of the year.
A bounce by Chinese stocks helped the Nikkei cut some losses, although it was not enough to lift Japanese stocks out of the red.
Japanese markets opened for the first time in 2019 on Friday after being shut for the new year holidays.
The broader Topix shed 1.53 percent to 1,471.16.
"Market instability has extended into the new year, as concerns towards the U.S. and Chinese economies have increased in the wake of weak manufacturing data from these countries," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
"Furthermore, markets have even begun pricing in the possibility of Fed cutting interest rates. We could see a big reaction if the U.S. non-farm jobs report proves to be weak."
Economists surveyed by Reuters expect U.S. nonfarm payrolls to have increased by 177,000 jobs in December after rising 155,000 in November.
Wednesday's China Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) marked the first contraction since May 2017 and Thursday's Institute for Supply Management (ISM) data showed U.S. factory activity in December suffer the biggest drop since October 2008.
Apple on Wednesday took the rare step of cutting its quarterly sales forecast, blaming slowing iPhone sales in China.
Japanese technology shares tracked their U.S. peers lower. S&P Technology companies had slid 5.1 percent on Thursday, its biggest one-day percentage drop since August 2011, after Apple's revenue warning sent shockwaves through the sector.
Murata Manufacturing Co lost 9.8 percent, Nitto Denko Corp fell 4.3 percent, TDK Corporation dropped 4.4 percent and Alps Alpine was down 6.1 percent.
Companies that derive a large portion of their sales in China also slipped. Industrial machinery maker Komatsu Ltd fell 3.2 percent, robot manufacturer Fanuc Ltd dropped 4.4 percent and cosmetics company Shiseido Co shed 5.4 percent.
Exporters retreated following the yen's surge over the past few days. The Japanese currency was above 110 yen to the dollar a week ago but last traded at 108.30.
Toyota Motor Corp lost 0.9 percent, Bridgestone Corp declined 1.7 percent and Subaru retreated 4.9 percent.
Of the Tokyo Stock Exchange's 33 subsectors, 27 ended in the red.
One of the 6 subsectors which gained on Friday was electricity and gas, with a stronger yen generally seen benefiting importers of fuel such as natural gas used to generate power.
The yen's appreciation also lifted furniture retailer Nitori Holdings Co, which imports a large portion of their goods, and cooking oil maker Nisshin Oillio Group which buys raw materials abroad.
Nitori gained 3.7 percent and Nisshin Oillio rose 2.2 percent.
© (c) Copyright Thomson Reuters 2019.
The Nikkei share average ended the day down 2.26 percent at 19,561.96 after losing as much as 3.86 percent, as investors digested bearish news since the start of the year.
A bounce by Chinese stocks helped the Nikkei cut some losses, although it was not enough to lift Japanese stocks out of the red.
Japanese markets opened for the first time in 2019 on Friday after being shut for the new year holidays.
The broader Topix shed 1.53 percent to 1,471.16.
"Market instability has extended into the new year, as concerns towards the U.S. and Chinese economies have increased in the wake of weak manufacturing data from these countries," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
"Furthermore, markets have even begun pricing in the possibility of Fed cutting interest rates. We could see a big reaction if the U.S. non-farm jobs report proves to be weak."
Economists surveyed by Reuters expect U.S. nonfarm payrolls to have increased by 177,000 jobs in December after rising 155,000 in November.
Wednesday's China Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) marked the first contraction since May 2017 and Thursday's Institute for Supply Management (ISM) data showed U.S. factory activity in December suffer the biggest drop since October 2008.
Apple on Wednesday took the rare step of cutting its quarterly sales forecast, blaming slowing iPhone sales in China.
Japanese technology shares tracked their U.S. peers lower. S&P Technology companies had slid 5.1 percent on Thursday, its biggest one-day percentage drop since August 2011, after Apple's revenue warning sent shockwaves through the sector.
Murata Manufacturing Co lost 9.8 percent, Nitto Denko Corp fell 4.3 percent, TDK Corporation dropped 4.4 percent and Alps Alpine was down 6.1 percent.
Companies that derive a large portion of their sales in China also slipped. Industrial machinery maker Komatsu Ltd fell 3.2 percent, robot manufacturer Fanuc Ltd dropped 4.4 percent and cosmetics company Shiseido Co shed 5.4 percent.
Exporters retreated following the yen's surge over the past few days. The Japanese currency was above 110 yen to the dollar a week ago but last traded at 108.30.
Toyota Motor Corp lost 0.9 percent, Bridgestone Corp declined 1.7 percent and Subaru retreated 4.9 percent.
Of the Tokyo Stock Exchange's 33 subsectors, 27 ended in the red.
One of the 6 subsectors which gained on Friday was electricity and gas, with a stronger yen generally seen benefiting importers of fuel such as natural gas used to generate power.
The yen's appreciation also lifted furniture retailer Nitori Holdings Co, which imports a large portion of their goods, and cooking oil maker Nisshin Oillio Group which buys raw materials abroad.
Nitori gained 3.7 percent and Nisshin Oillio rose 2.2 percent.
© (c) Copyright Thomson Reuters 2019.
- January 5, 2019
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