Nikkei 225

Japan Shares Drop on Soft Output Data, Middle East Risks

Japan stocks closed lower Thursday, pressured by weaker factory output data that signaled mounting economic strain from Middle East tensions.The Nikkei 225 fell 1.06%, or 632.54 points, to close at 59,284.92.Industrial production fell 0.5% in March from a month earlier, missing expectations for a 1.1% rise and marking a second straight decline after a 2.0% drop in February, government data showed.Manufacturers expect output to fall 0.7% in April. The weak trend underscores the challenge for the Bank of Japan, as rising oil prices lift inflation while weighing on the import-reliant economy.In other economic news, Retail sales rose 1.7% year on year to 14.3 trillion yen in March, rebounding from a 0.1% decline, as gains in food and beverage offset a drop in fuel sales.On the corporate front, Yamaichi Electronics (TYO:6941) rose 4% after restoring systems at its Philippines unit following a ransomware attack, with no operational or data leak impact.Globe-ing (TYO:277A) fell 4% after shifting its listing to the Prime Market from the Growth segment on the Tokyo Stock Exchange.Toho Holdings (TYO:8129) gained 3% after saying it will seek shareholder approval to activate takeover defenses against a large-scale share purchase by 3D Investment Partners.

Market Chatter: ADB Eyes Disaster Coverage Push as Climate Risks Rise

Asian Development Bank will begin offering disaster insurance alongside infrastructure financing in Southeast Asia as early as next year, Nikkei reported Thursday.The move builds on a regional framework backed by countries including Japan and Singapore, under which Laos has already received about 6.5 million dollars in payouts for flood damage, according to the report.A disaster risk financing body tied to the initiative is set to come under ADB oversight, with ASEAN+3 finance ministers expected to discuss the shift at an upcoming meeting in Samarkand, the report said.Pairing insurance with loans is aimed at limiting repayment risks after natural disasters, which have caused heavy economic losses across Asia, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Fujitsu, Oriental Land, JR Central Slide as Japan Stocks Close Earnings Lower

Japanese stocks that reported recent earnings mostly fell on Thursday, tracking a broader market decline, with losses led by companies issuing cautious outlooks despite solid full-year performance.Fujitsu (TYO:6702) slumped 14% after reporting full-year results. Profit attributable to owners of parent more than doubled to 449.41 billion yen, even as revenue edged down 1.3% to 3.503 trillion yen. The company forecast profit attributable to owners of parent of 310 billion yen for the next fiscal year, down 31%, alongside revenue of 3.51 trillion yen.Oriental Land (TYO:4661) dropped 10% after posting full-year earnings. Profit attributable to owners of parent slipped 1.8% to 121.88 billion yen, while revenue rose 3.7% to 704.54 billion yen. The company projected profit attributable to owners of parent of 113.80 billion yen for the next fiscal year, down 6.6%, with revenue expected at 724.31 billion yen.Central Japan Railway (TYO:9022) declined 8% after reporting full-year results. Net income attributable to owners of parent rose 20.6% to 552.87 billion yen as operating revenue increased 9.5% to 2.006 trillion yen. The company expects declines across key metrics in the next fiscal year, forecasting net income attributable to owners of parent to fall about 19% alongside weaker operating income and revenue.

Japan's Retail Sales Rebound in March

Japan's retail sales rebounded in March, growing by 1.7% to 14.306 trillion yen from a year ago, preliminary data from the Ministry of Economy, Trade, and Industry on Thursday showed.The reading reverses the 0.1% contraction in the month prior.Retail sales climbed 0.4% in food and beverage but contracted 4.1% in fuel.Commercial sales gained 3.2% on year to 58.826 trillion yen, while wholesale trade gained 3.7% to 44.52 trillion yen, the data showed.

Market Chatter: PAG Plans Larger Japan Bet on Property Sales

PAG plans to step up investment in Japan, targeting real estate divestments by listed companies amid rising governance pressure, Nikkei reported Thursday.The firm aims to deploy about $11 billion to $12 billion over the next three to four years across property, private equity and other assets, after reaching roughly halfway on an earlier $7 billion plan, according to the report.Cofounder Jon-Paul Toppino said shareholder activism and proposed governance revisions by Japan's Financial Services Agency are prompting companies to reassess balance sheets, creating acquisition opportunities, the report said.PAG, which manages about $55 billion of assets across the Asia-Pacific region, has invested in assets including USJ and Huis Ten Bosch, and partnered with KKR to acquire Sapporo Real Estate, owner of Yebisu Garden Place in Tokyo, according to the report.The group plans to allocate about 70% of capital from a new $2.5 billion Asia real estate fund and an existing vehicle to Japan, focusing on offices, housing, hotels, data centers and renewable energy, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Japan Consumer Firms Step up Chip Materials Push

Japanese consumer goods makers are moving further into semiconductor materials to capture AI-led demand, Nikkei reported Thursday.Kao Corporation (TYO:4452) has set up a Taiwan hub to develop and produce chip-cleaning agents with customers including Taiwan Semiconductor Manufacturing Company (TPE:2330), as advanced chips increase the need for contamination control, according to the report.Its semiconductor cleaning sales rose about 40%, supporting a 7% gain in chemical revenue to 451.5 billion yen, the report said.Ajinomoto (TYO:2802) is expanding capacity for its ABF insulating film, which holds over 95% global share in chip substrates, with more than 25 billion yen in planned investment through 2030, according to the report.Sakura Color Products Corporation and Nisshin Seifun (TYO:2002) unit Nisshin Engineering are also applying legacy technologies to chip production processes, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japan's Industrial Production Slips 0.5% in March

Japan's industrial production index slipped by a seasonally adjusted 0.5% in March, but rose 2.3% from a year ago, the Ministry of Economy, Trade and Industry said on Thursday.Inorganic and organic chemicals, general-purpose and business-oriented machinery, and petroleum and coal products mainly contributed to the monthly decrease.The shipments in Japan slid 1.1% in March from the month prior but climbed 2% from a year ago, the data showed.Inventories declined by 1.5% in March from a month ago, and fell 4.9% year-on-year.The ministry's most recent survey showed that producers expect the reading in April and May to increase 2.1% and 2.2%, respectively, month on month.

Japanese Stocks Fall at Open as Iran Tensions Drive Oil Prices Up

Japanese shares opened lower when trading resumed on Thursday after a market holiday, as renewed uncertainty surrounding the conflict in Iran pushed oil prices higher.The Nikkei 225 fell by 432.8 points, or 0.7%, to open at 59,484.71.Weak sentiment hounded markets as U.S. crude prices rose to their highest since 2022 after President Donald Trump told Axios that he would not end the naval blockade of Iranian ports unless Tehran agrees to a new deal addressing its nuclear program.Brent crude closed near $120 per barrel.In a separate development, Jerome Powell held his final press conference as head of the Federal Reserve, highlighting that he will remain on the board as a 'low-profile' governor.His departure follows the Justice Department's decision to drop a controversial criminal investigation into the central bank, paving the way for the Senate to confirm Kevin Warsh as the next Fed chair.

Property, Tech Sectors Undergird Asian Stock Markets

Asian stock markets somewhat shrugged off Middle East turmoil, with tech shares rising on earnings outlooks, and China property issues gaining after a Beijing report indicated the struggling sector may be firming.Exchanges in Japan were closed on holiday.Hong Kong and Shanghai finished in the green, while other regional exchanges were uneven.In Hong Kong, the Hang Seng Index opened higher and rose to the close, finishing up 1.7% in a property-sector-led rally.The broad gauge Hang Seng rose 432.06 to 26,111.84, as gaining issues outnumbered losers 77 to 13. The Hang Seng TECH Index gained 1.7% on the day, while the Mainland Properties Index rose 4.5%.Leading the upside was China Overseas Land, gaining 8.9%, while pork purveyor WH Group declined 5.8%.On the mainland, the Shanghai Composite rose 0.7% to 4,107.51.In economic news, China's housing markets are showing signs of recovery, with transaction volumes in major cities rising in March and price declines shrinking, "indicating a gradual return of buyer confidence and improving market liquidity," reported the official State Council Information Office.On the other regional exchanges, the S. Korean KOSPI rose 0.8%; the Taiwan TWSE declined 0.5%; the Australian ASX 200 declined 0.3%; the Singapore Straits Times Index fell 0.6%, and the Thai Set inclined 0.8%. In late trading in Mumbai, the Sensex was up 0.8%.MSCI All Country Asia Pacific Index rose 0.1%.

Japan Central Bank to Retain Monetary Policy Normalization on Entrenched Inflation, S&P Says

Japan's central bank will further progress with the normalization of monetary policy as the country observes entrenched inflation, Fitch Ratings said in a recent release.The country has moved past the decades-long weakness in nominal growth and deflation, with inflation now growingly domestically driven, Fitch said.These driving domestic factors include rapidly growing wages and profits per unit of GDP and expectations of price increases among households, investors, and businesses, Fitch said.Corporates are also exhibiting more solid balance sheets, allowing them to buffer against higher wages costs and greater debt, Fitch said.Better nominal GDP growth also anchors asset price reflation and increased government bond yields, in line with a more normal inflation and interest rate conditions.Average headline consumer price inflation has been at 2.9% since 2022, greater than the Bank of Japan's 2% goal, the rating agency said.Meanwhile, recent drops in headline inflation are driven by government energy efforts rather than a slowdown in underlying price constraints, the rating agency said.The rating agency expects continued rate increases from the central bank, with the policy rate growing by 75 basis points this year to 1.5%.

Profit-Taking, Persian Gulf Views Blunt Asian Stock Markets

Asian stock markets largely declined on Tuesday, as traders booked profits on tech-sector issues and weighed Middle East outlooks.Hong Kong, Shanghai and Tokyo finished in the red, as did most other regional exchanges, although Seoul's KOSPI index rose 0.4% to strike another fresh all-time zenith.In Japan, the Nikkei 225 opened lower and sank to the close, finishing off 1% as traders sold off AI- and semiconductor-related issues.The benchmark Nikkei 225 fell 619.90 to 59,917.46, although gaining issues outnumbered losers 183 to 41, as declines were largely restricted to tech plays.Leading the upside was diversified finance house Orix, gaining 9.8%, while tech-financiers SoftBank fell 9.9%.In economic news, the Bank of Japan held its short-term policy rate at 0.75% by a 6-3 vote, leaving the rate unchanged since last December.The central bank forecast that the nation's consumer price index-core (CPI-core), that strips out fresh food prices, will rise 2.8% in fiscal 2026 (started April 1), up from the 1.9% estimate in January.In addition, the Bank of Japan lowered its forecast for gross domestic product (GDP) growth to 0.5% for the fiscal year, down from 1% in its the previous outlook.In Hong Kong, the Hang Seng Index opened lower and could not recover, closing down 1% as tech and property issues lagged.The broad gauge Hang Seng fell 245.87 to 25,679.78, as losing issues outnumbered gainers 61 to 28. The Hang Seng TECH Index lost 2.3% on the day, while the Mainland Properties Index fell 1%.Leading the upside was Wuxi AppTec, gaining 13.6% after reporting earnings, while Contemporary Amperex Technology declined 6.9%.On the mainland, the Shanghai Composite fell 0.2% to 4,078.64.On the other regional exchanges, the Taiwan TWSE declined 0.2%; the Australian ASX 200 declined 0.6%; the Singapore Straits Times Index fell 0.1%, and the Thai Set inclined 0.1%. In late trading in Mumbai, the Sensex was down 0.6%.MSCI All Country Asia Pacific Index fell 0.4% on the day.

Japan Unemployment Rate Edges Higher in March

Japan's national unemployment rate rose to 2.7% in March, edging up from 2.6% in February, and perhaps indicating the first negative ripples of higher oil prices and lagging global trade in the wake of the Persian Gulf war.The number of unemployed in Japan increased by a seasonally adjusted 10,000 in March from February, to 1.86 million.The number of employed declined by 120,000 in March from February, to an 11-month low of 68.15 million, while the labor force shrank by 100,000 to a seven-month low of 70.02 million.In recent years, due to an aging population, Japan's potential labor force has been decreasing, as more former workers pass into retirement age but are not replaced by younger labor-force entrants.In general, many businesses describe Japan as experiencing "labor shortages."The nation's labor force participation rate, that is, the percent of working-age adults either employed or seeking employment, edged up to 63.6% in March from 63.5% in February and was slightly higher than the 63.3% registered a year earlier.Separately, in March, there were a seasonally adjusted 118 jobs open for every 100 job hunters, down modestly from 119 in February, reported the Ministry of Health, Labor and Welfare.

Rate Increases Have Limited Impact on Japanese Borrowers' Credit Quality, S&P Says

Increasing interest rates will not have a significant effect on Japanese borrowers' creditworthiness, although repayment burdens could intensify if the rise in rates continues, S&P Global Ratings said in a Tuesday release.The rating agency expects limited impact on repayment capacity from higher interest rates as residential mortgage-backed securities (RMBS) are usually backed by fixed-rate housing loans, S&P said.However, rate increases could heighten total borrowing, especially under increased real estate prices, S&P said.The spike in housing prices is likely due to increased employment costs and a sustained rise in imported material prices, the rating agency said.Still, S&P expects that even under the most severe stress scenario, tranches to be downgraded would only have a 17% share of all rated RMBS transactions and still lead to ratings of A+ or higher.

Bank of Japan Holds Rates, Cuts Growth Outlook, Raises Inflation View

Citing heightened inflation risks but also a slowing economy, in a mixed decision the Bank of Japan kept its key interest rate unchanged, the central bank disclosed Tuesday.The Bank of Japan held its short-term policy rate at 0.75% by a 6-3 vote, leaving the rate unchanged since last December.Bank of Japan Governor Kazuo Ueda said policymakers need more time to assess how the Persian Gulf war and the closure of the Strait of Hormuz will affect prices and the economy.Demonstrating the impact of higher oil prices, the central bank forecast that the nation's consumer price index-core (CPI-core), that strips out fresh food prices, will rise 2.8% in fiscal 2026 (started April 1), up from the 1.9% estimate in January.In addition, the Bank of Japan lowered its forecast for gross domestic product (GDP) growth to 0.5% for the fiscal year, down from 1% in its the previous outlook.Until recent years, the Bank of Japan has struggled not with inflation but near-deflation, and also extended sluggish economic growth, resulting in what some critics termed "lost decades."In recent seasons, central bank officials have reiterated they want to keep demand for labor strong enough that real wages rise, thus allowing more consumption and overall economic expansion.Until today's forecast, the Bank of Japan also issued sanguine inflation forward estimate, that the CPI-core would recede to within the bank's 2% target in fiscal 2026.In fact, in March, Japan logged a modest 1.8% increase in the CPI-core on year, reported the Statistics Bureau.But going forward, with higher oil prices, and the weakest yen vs. the US dollar in 35 years, the Bank of Japan is now forecasting that inflation will rise above the central bank's target.Japan's central bank next meets on April 27-28."We continue to believe there's a chance that the BoJ may hike on 28 April," said ING Think, an rm of the Dutch investment house. "Board members' concerns about higher inflation expectations are likely to increase as real interest rates remain deeply negative."

Japan Stocks Fall as BOJ Holds Rates, Flags Middle East Uncertainty

Japanese equities closed lower on Tuesday after the Bank of Japan held its policy rate at 0.75% and flagged heightened uncertainty around the economic outlook.The Nikkei 225 fell 1.02%, or 619.90 points, to close at 59,917.46.The decision came with dissent from three board members who called for a rate increase, reinforcing expectations of a potential policy shift. Governor Kazuo Ueda said the likelihood of achieving the bank's forecasts has weakened due to uncertainty tied to the Middle East conflict.He said risks are skewed both ways, with downside pressure on growth and upside risks to inflation, particularly in fiscal 2026, making it difficult to assess the duration and impact on the economy and prices.In other economic news, Japan's unemployment rate rose to 2.7% in March from 2.6%, as the number of employed fell to 68.15 million and jobless increased to 1.86 million.On the corporate front, Shares of Denso (TYO:6902) fell about 3% after it withdrew its proposal to acquire a stake in ROHM (TYO:6963), citing lack of support and limited value upside.Shares of Nissan Motor (TYO:7201) rose about 4% after it forecast a narrower fiscal 2025 loss, with loss per share seen at 157.42 yen and net loss at 550 billion yen alongside slightly higher sales.Shares of Idemitsu Kosan (TYO:5019) gained about 3% after a report said it will supply Vietnam with around 4 million barrels of crude via routes bypassing the Strait of Hormuz.

BOJ Holds Rates as Three Members Push for Hike

The Bank of Japan kept interest rates unchanged but faced dissent from three board members who called for a hike, highlighting concern over inflation risks linked to the Middle East conflict.The central bank held its short-term policy rate at 0.75% at the end of a two-day meeting. Board members Hajime Takata, Naoki Tamura and Junko Nakagawa proposed raising rates to 1%.Governor Kazuo Ueda said policymakers need more time to assess how the Middle East situation will affect prices and the economy.He said Japan's economy is recovering moderately, though with some weakness, and expects growth to slow in 2026. Ueda also flagged the risk of inflation overshooting, which could weigh on economic activity.

Market Chatter: Japan IPO Market Will Stay Subdued as AI Stocks Draw Investors

Japan's IPO market will remain under pressure despite strong debuts from a sake brewer and a pet food maker, as investors continue to favor AI-related stocks, Reuters reported Tuesday.Shares of Umenoyado Brewery (TYO:559A) rose about 75% on their first trading day, while Inuneko-Seikatsu (TYO:556A) gained more than 30% after listing. The gains contrast with broader weakness, with many new listings trading below their offer prices this year, the report said.Investor focus on AI leaders such as SoftBank Group (TYO:9984) and Advantest (TYO:6857) has diverted flows away from smaller, domestically focused IPO candidates. Stricter listing standards from the Tokyo Stock Exchange are also weighing on activity, with companies facing tougher valuation thresholds in coming years, according to the report.The number of IPOs in Tokyo will likely fall about 20% this year from 2025 levels, as retail investors prioritize short-term gains in large-cap technology stocks over new listings, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Japan Life Insurers Will Boost Domestic Bonds as Yields Rise

About half of Japan's major life insurers will increase domestic bond holdings in fiscal 2026 as long-term yields rise, a Nikkei survey showed Tuesday.Five of 10 insurers plan to add Japanese government bonds, up from four a year earlier, with 20-year yields around 3.3%. The narrowing gap with U.S. yields and hedging costs are reducing the appeal of foreign debt, with only Nippon Life Insurance and Meiji Yasuda Life Insurance planning increases, according to the report.Meiji Yasuda Life Insurance will buy about 1 trillion yen of ultra long-term bonds, while Japan Post Insurance (TYO:7181) will raise holdings for the first time in nearly two decades, the report said.Total domestic bond holdings across the 10 insurers will still fall by about 1.5 trillion yen, a smaller drop than a year earlier. All plan to increase allocations to alternative assets such as private credit, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Bank of Japan Keeps Benchmark Interest Rate Steady at 0.75%

Japanese Stocks Open Muted Ahead of Rate Decisions, Tech Earnings as US-Iran Talk Progress Stalls

Japanese stocks showed little movement at open ahead of the Bank of Japan's rate decision later Tuesday, as investors turned their focus to tech earnings later this week amid a lack of geopolitical progress.The Nikkei 225 opened in negative territory, slipping marginally at 60,531.78.This week, central banks. including the U.S. Federal Reserve, the European Central Bank, and those in Japan, the UK, and Canada, are all scheduled to set rates, collectively influencing monetary policy for roughly half of the global economy.With no significant breakthroughs on the geopolitical front, investors have shifted their attention to earnings reports from a group of tech giants, including Alphabet, Microsoft, Amazon, and Meta, all due on Wednesday, followed by Apple on Thursday.Meanwhile, the White House stated that U.S. officials are discussing Iran's latest proposal but continue to maintain red lines regarding any potential deal to end the eight-week conflict.