RTTNews - Caution ahead of earnings season, weak crude oil prices and a stronger yen dragged Japanese stocks down into the red in early trading on Thursday.

Stocks across various sectors tumbled in early trading in Tokyo this morning. Securities, auto and machinery stocks were among the major losers. Though several stocks are off their lows now on modest buying support, the market is still trading in the red.

Extending its fall to a seventh successive session, the Nikkei opened 0.8% down at 9,342.33 this morning and declined further to 9,307.81 subsequently. The index is currently trading at 9,381.90, down 38.85 points or 0.41% from its previous close.

The Nikkei had ended 227.04 points or 2.35% down at 9,421 on Wednesday with an unexpected drop in core production orders for May and a strong yen triggering a heavy sell-off across the board.

Machinery, auto and bank stocks exhibit weakness. Construction, foods and chemicals stocks are mostly down in the red. Textiles, pharmaceuticals, steel and non-ferrous metals are also trading weak. Insurance stocks are trading mixed.

Sumitomo Metal Mining is trading nearly 2% up after a four-day retreat, buoyed by an overnight rise in Alcoa of the U.S. in after-hours trading. The American firm said Wednesday that it posted an operating loss for the April-June quarter. However, the non-ferrous metal company's sales outperformed market expectations.

Chuo Mitsui Trust Holdings Inc. is extending its recent losses with the June data on corporate bankruptcies released on Wednesday showing the first increase in the number of failures in two months, fueling investor concerns over a possible rise in credit costs. The stock fell to a two-month low this morning and is currently trading nearly 3% down from its previous close.

The sharp fall in crude oil prices took a fairly heavy toll of Japan Petroleum Exploration and Inpex Corp. shares earlier this morning. Though the two stocks have regained some lost ground since then, they are still down in the red, trading lower by 2% and 0.7% respectively.

In the currency market, the U.S. dollar traded in the upper 92 yen range early Thursday in Tokyo, carrying its weakness over from trading in New York overnight, where it had hit a five-month low in the upper 91 yen level on growing pessimism about the global economy. The yen is currently trading at 93.10 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Australia and New Zealand are trading with modest losses. Shanghai is trading flat. Korea, Singapore and Taiwan are trading higher with their benchmark indices gaining between 0.5% and 1.75%. Stock markets across the Asia-Pacific region had ended Wednesday's session lower.

Wall Street ended little changed on Wednesday with traders not evincing any keen interest in taking up positions ahead of the start of the earnings season. The major averages closed on opposite sides of the unchanged mark by slim margins, with the S&P 500 closing modestly lower despite a late-session rally. The Dow closed up by 14.81 points or 0.2% at 8,178 and the Nasdaq rose by 1 point or 0.1% to 1,747, while the S&P 500 fell 1.47 points or 0.2% to 880.

Major European markets also ended the day in the red. The French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 1.3% and 1.1% respectively, while the German DAX Index closed down by 0.6%.

Oil plunged for a sixth straight session and reached its lowest level in seven weeks on Wednesday. Prices dropped on government data that revealed a build in gasoline and distillate fuel supplies in the recent week.

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