Japan Nikkei extends losses

Japan share market finished session lower on Thursday, 30 June 2022, extending yesterday's losses, on growing concerns over a possible recession in the United States as well as domestic economic slowdown after Japanese industrial output fell the most in two years in May.

At closing bell, the 225-issue Nikkei Stock Average dropped 411.56 points, or 1.54%, to 26,393.04. The broader Topix index of all First Section issues on the Tokyo Stock Exchange declined 22.75 points, or 1.2%, to 1,870.82.

Total 27 of 33 TSE sub-indexes ended in red, with Mining, Other Financial Business, Electric Appliances, Real Estate, Marine Transportation, and Oil & Coal Products issues suffering the largest percentage losses. On the upside, Textiles & Apparels and Electric Power & Gas issues enjoyed the largest percentage gains.

Investors fretted over the impact of hefty rate increases on the U.S. economy, as data highlighted the contraction of the U.S. economy in the first quarter amid a record trade deficit following a Tuesday report that showed U.S. consumer confidence hit a 16-month low. Federal Reserve Chairman Jerome Powell reaffirmed Wednesday the U.S. central bank's pursuit of aggressive rate hikes.

Shares of exporters were lower on gloomier prospects for the world economy as the central banks in the United States and Europe have sanctioned a series of interest rate hikes

Among exporters, automakers were notably lower, with Toyota losing 1.3% to 2,100 yen, Honda falling 1.7% to 3,293 yen, and Nissan ending down 3.8% at 528.2 yen. SoftBank Group slipped 1.7% to 5,235 yen, while Uniqlo operator Fast Retailing ended down 0.6% at 71,080 yen.

Bucking the downward trend, Sanrio, the company behind the Hello Kitty franchise, surged 13.8% to 3,085 yen, a day after the firm said it signed a licensing agreement with a subsidiary of China's Alibaba Group Holding Ltd., raising hopes of increased sales.

ECONOMIC NEWS: Japan's industrial output in May fell 7.2% from the previous month for the second consecutive month of decline, the Ministry of Economy, Trade and Industry data showed on Thursday. The seasonally adjusted index of production at factories and mines stood at 88.3 against the 2015 base of 100. The decline followed a decrease of 1.5% in April. The index of industrial shipments declined 4.3% to 89.0, while that of inventories was down 0.1% at 98.5.

CURRENCY NEWS: The Japanese yen appreciated against greenback as concerns about the U.S. economic outlook and falling Tokyo stocks prompted some traders to buy the yen for its perceived safety. The U.S. dollar slipped into the lower 136 yen zone, after hitting a fresh 24-year high of 137.00 overnight in New York.

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