FX.co ★ Japanese Market Significantly Lower

On Wednesday, the Japanese stock market dropped significantly, surrendering some of its gains from the previous two sessions. This trend came in the wake of generally unfavorable signals from globally. The Nikkei 225 descended, barely remaining above the 38,100 mark with most sectors experiencing losses. These were spearheaded by major stocks and tech companies due to a surge in treasury yields.

The influential Nikkei 225 index decreased by 294.52, or 0.77 percent, to 38,111.14, hitting a low of 39,217.04 at one point. Nevertheless, Tuesday saw Japanese stocks close with substantial growth.

Prominent market player SoftBank Group experienced a near 2 percent loss, and major clothing retailer Fast Retailing fell more than 1 percent. Among car manufacturers, both Honda and Toyota shares declined, with losses hovering around 2 percent and 1 percent respectively.

In the tech industry, Advantest saw over a 2 percent increase, whereas Screen Holdings and Tokyo Electron both faced declines of more than 1 percent. Financial market shares followed the same trend, with Mizuho Financial, Mitsubishi UFJ Financial, and Sumitomo Mitsui Financial all recording losses.

Among major exporters, Sony fell almost 1 percent, Panasonic over 1 percent, and Canon 0.3 percent. Contrastingly, Mitsubishi Electric's shares rose over 2 percent.

Other notable losers included JGC Holdings, which dropped nearly 11 percent, and Tobu Railway, which fell over 5 percent. There were also losses for Mitsui O.S.K. Lines, Kawasaki Kisen Kaisha, Nomura Holdings, Japan Exchange Group and Toto, all declining over 4 percent. Tokyo Electric Power, Mitsubishi Motors, Nippon Electric Glass, and Mercari dropped almost 4 percent, while ZOZO, M3, Nippon Yusen K.K., and Fuji Electric all decreased more than 3 percent.

On the other hand, major gainers were Lasertec and West Japan Railway with increases of over 14 percent and 7 percent respectively. Cosmetics giant Shiseido and Tokyo Gas also witnessed growth, with both gaining nearly 3 percent.

In economic news, Japan's manufacturing sector's contraction continued into April, albeit at a slower rate, as indicated by a Jibun Bank survey released on Wednesday. Manufacturing PMI was 49.6, up from March’s 48.2 but still under the crucial 50 mark that differentiates expansion from contraction. Recent data showed that output was still falling in April, marking an 11-month contraction period.

In the forex market, the U.S dollar traded in the upper 157 yen-range on Wednesday.

As for Wall Street, stocks dipped on Tuesday amid rising concerns about inflation and uncertainty over the Federal Reserve's future interest rate movements. All major indexes ended with notable losses, with the Nasdaq suffering the most.

Major European markets followed a similar downward trend. The UK’s FTSE 100 edged down 0.04 percent, Germany's DAX and France's CAC 40 ended down 1.03 percent and 0.99 percent, respectively.

Concerns regarding economic growth, outlook for oil demand, and a strengthened dollar lead to a decrease in crude oil prices on Tuesday. June’s West Texas Intermediate Crude oil futures fell by $0.70 to $81.93 a barrel.