The Japanese stock market experienced a modest decline amid volatile trading sessions on Wednesday, reversing the gains seen in the previous session. This downturn followed a mixed performance on Wall Street overnight. The Nikkei 225 index dropped below the 38,400 mark, primarily due to declines in financial and technology sectors.
The Nikkei 225 benchmark index decreased by 86.71 points or 0.23% to reach 38,327.72, after fluctuating between a high of 38,520.45 and a low of 38,300.01 earlier in the session. Notably, Japanese stocks had closed significantly higher on Tuesday.
Among key market players, SoftBank Group saw a slight increase of 0.4%, while Fast Retailing, the operator of Uniqlo, edged down by 0.3%. In the automotive sector, Honda fell by over 1%, and Toyota witnessed a near 1% decline.
In the technology sphere, Advantest and Tokyo Electron both declined by almost 1%, with Screen Holdings dropping by 1.5%. The banking sector also saw losses, with Sumitomo Mitsui Financial and Mitsubishi UFJ Financial both losing over 1%, whereas Mizuho Financial slightly shrank by almost 1%.
Major exporters presented a mixed performance: Sony gained over 3%, Mitsubishi Electric increased slightly by 0.2%, while Canon dipped by 0.3% and Panasonic fell by more than 1%.
Significant losers included Tokio Marine Holdings, which plunged over 7%, and MS&AD Insurance, which declined nearly 5%. Conversely, Sompo Holdings and Tokyo Gas soared over 11% each, Seven & I Holdings surged nearly 9%, and both Konica Minolta and Nidec gained over 4%. Japan Steel Works added more than 3%, while Sharp, CyberAgent, and Yamaha advanced almost 3% each.
In economic developments, Japan reported a merchandise trade deficit of 461.2 billion yen for October, which was larger than the anticipated shortfall of 360.4 billion yen and followed September's upwardly revised deficit of 294.1 billion yen. Exports increased by 3.1% annually to 9.426 trillion yen, surpassing the expected rise of 2.2% and contrasting with the 1.7% decline the previous month. Imports rose by 0.4% year-on-year to 9.887 trillion yen, against expectations for a 0.3% decrease, following a 1.8% increase in the prior month.
In the currency sector, the U.S. dollar was trading in the upper 154 yen range on Wednesday.
On Wall Street, stocks initially declined on Tuesday but rebounded significantly during the trading day. The Nasdaq and S&P 500 recovered from earlier lows to enter positive territory, although the narrower Dow Jones remained in negative territory.
By the end of the trading day, results were mixed: the Dow fell by 120.66 points or 0.3% to 43,268.94, while the S&P 500 rose by 23.36 points or 0.4% to 5,916.98, and the Nasdaq surged by 195.66 points or 1.0% to 18,987.47.
Meanwhile, major European markets experienced declines. The UK's FTSE 100 Index edged down by 0.1%, while the French CAC 40 Index and the German DAX Index both fell by 0.7%.
Crude oil prices settled higher on Tuesday due to the increasing likelihood of supply disruptions following Ukraine's launch of long-range U.S.-made missiles, targeting a facility in Russia's Bryansk region. West Texas Intermediate Crude oil futures for December rose by $0.23, or approximately 0.3%, to settle at $69.39 per barrel.