FX.co ★ Japanese Market Significantly Lower

The Japanese stock market commenced its week on a low note, with significant losses reversing gains made in the previous session. Driven by negative cues from Wall Street, the benchmark Nikkei 225 Index descended to 39,127.55, a 1.00 percent drop. The market was dominated by weakness across multiple sectors, especially among index heavyweights and technology stocks. Rising geopolitical tensions in the Middle East also contributed to the dampened market sentiment.

Leading losses in the market was SoftBank Group and Fast Retailing, both index heavyweights, seeing declines of over 2 percent and 1 percent respectively. Among automakers, Honda and Toyota saw declines of over 2 percent and over 1 percent respectively. Tech industry losses were led by Screen Holdings, down by over 2 percent, Advantest, down 2.5 percent, and Tokyo Electron, down by nearly 2 percent.

Financial institutions likewise experienced a downturn, with Sumitomo Mitsui Financial down almost 1 percent, Mizuho Financial down by a half percent, and Mitsubishi UFJ Financial losing over 1 percent. Major exporters like Canon, Panasonic and Sony also suffered, albeit to a lesser extent. Prominent losses were registered by Takashimaya, Astellas Pharma, and Socionext among others.

The news wasn't all bad, however. Mitsubishi Materials, Mitsui Mining & Smelting and Tokyo Electric Power saw gains of approximately 3 percent.

In economic developments, core machine orders in Japan saw a significant rise of 7.7 percent in value, reaching a total of 886.6 billion yen. This dramatic increase greatly outpaced expectations of just a 0.8 percent growth, and marked recovery from January's 1.7 percent decline. Year on year, though, core machine orders saw a small drop of 1.8 percent.

Currency trading saw the U.S. dollar performing strongly against the yen. Wall Street, however, faced a downturn due to an unfavourable combination of geopolitical tensions, inflation concerns and mixed bank earnings. Consequently, the major averages closed in the red.

Across the globe, European markets demonstrated a mixed performance. While UK's FTSE 100 saw an increase, Germany's DAX and France's CAC 40 experienced minor losses. In energy trading, West Texas Intermediate crude oil prices rose due to concerns about supply disruption triggered by escalating Middle East tensions.