The Japanese stock market was trading lower on Wednesday for the third straight session, tracking the negative cues overnight from Wall Street. Additionally, exporters were dragged down by a stronger yen.
In early morning trades, the benchmark Nikkei 225 Index was losing 81.75 points or 0.92% to 8,842.68 and the broader Topix Index of all First Section Issues was down 6.59 points or 0.78% to 836.83.
U.S. stocks closed lower on Tuesday as traders reacted to worse-than-expected retail sales data for the month of March and largely shrugged off some optimistic comments from President Obama and Federal Reserve Chairman Bernanke. Investors were also worried that other banks will follow Goldman Sachs' lead and issue stock to pay off government debt.
Crude oil dropped below $50 a barrel on Tuesday amid choppy trading. Traders awaited the weekly inventory report from the Energy Information Administration on Wednesday. Light sweet crude oil for May delivery ended at $49.41 on the New York Mercantile Exchange, down $0.64 for the session.
The Japanese market ended Tuesday's session in negative territory, dragged down by realty stocks, after property company Sumitomo Realty & Development reported a lower than expected profit due to writedowns. The Nikkei 225 Index posted a loss of 81.75 points or 0.92% to finish at 8,842.68 and the Topix index closed down 5.55 points or 0.7% at 843.42.
On the economic front, Japan is scheduled to release final numbers for February industrial production and capacity utilization.
In the currency market, the U.S. dollar was trading in the lower 99 yen-range on Wednesday. In early trades Tokyo, the dollar was quoted in a range of 99.08-99.10 yen, down 0.55 yen from Tuesday's close of 99.63-99.64 yen.
In the banking sector, Mitsubishi UFJ, Japan's biggest bank, is declining 2.23%, Mizuho Financial is down 1.53%, Sumitomo Mitsui is losing 1.63% and Resona Holdings is down 0.97%. Brokerage Nomura Holdings is unchanged.
Among exporters, Canon is losing 2.57%, Sony is declining 1.96% and Sharp is down 1.39%. Construction machinery manufacturer Komatsu Ltd. said Tuesday that it will close down two domestic factories and a facility operated by a subsidiary to deal with ongoing tepid demand. The company's stock is down 3.24%. Among automakers, Toyota is down 0.79% and Honda is declining 1.64%.
In the oil sector, Inpex is easing 0.69%, Nippon Oil is losing 1.14% and Showa Shell is edging down 0.44%. However, trading house Mitsubishi Corp. is losing 1.43%, Sumitomo Corp. is down 0.75% and Itochu is declining 1.58%.
Aeon Co Ltd., Japan's second-largest retailer, reported its first annual net loss in seven years on Tuesday, as it grapples with weak domestic consumer spending and a dismal performance at Talbots Inc., its majority-owned U.S. women's apparel business. The company's stock is unchanged.
Department store chain J. Front Retailing said on Tuesday that it expects its net profit to fall 30% to yen 5.0 billion yen for the year ending February 2010. Shares of the company are losing 1.43%.
Shares of Kirin Holdings Co. are up 0.27%. On Tuesday, the company said that it will sell all its shares in Pernod Ricard, a French maker of wines and spirits, after Kirin's contract to distribute Chivas Regal scotch and other beverages in Japan expires. Kirin, whose European subsidiary currently holds 8.23 million shares, or 3.74% of Pernod Ricard's outstanding stock, plans to sell the shares to Pernod Ricard's main shareholder sometime in the current quarter.
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