TOKYO (dpa-AFX) - The Japanese stock market is extending its losing streak to a third day following the negative cues overnight from Wall Street and as investors worried about U.S.-China trade talks as well as Japan-South Korea trade tensions.
In addition, a stronger yen weighed on shares of exporters. Investors also digested Japan's trade data for June released today.
The benchmark Nikkei 225 Index is declining 256.62 points or 1.20 percent to 21,212.56, after falling to a low of 21,151.92 earlier. Japanese stocks closed lower on Wednesday.
The major exporters are notably lower on a stronger yen. Canon is declining more than 3 percent and Sony is losing almost 3 percent. Mitsubishi Electric and Panasonic are lower by more than 2 percent each.
Among tech stocks, Advantest is down 0.5 percent and Tokyo Electron is lower by 0.4 percent.
In the auto space, Honda Motor is declining more than 1 percent and Toyota Motor is down 1 percent. In the oil sector, Inpex is losing almost 3 percent and Japan Petroleum is lower by more than 2 percent after crude oil prices extended losses overnight.
Market heavyweight SoftBank is losing almost 2 percent, while Fast Retailing is edging up 0.1 percent.
Among the major decliners, Idemitsu Kosan is losing more than 4 percent and JXTG Holdings is lower by 4 percent. Kawasaki Kisen Kaisha, Nikon Corp, Fukuoka Financial and Tokyo Seikan Group are all declining more than 3 percent each.
In economic news, the Ministry of Finance said that Japan posted a merchandise trade surplus of 589.5 billion yen in June. That exceeded expectations for a surplus of 403.5 billion yen following the 968.3 billion yen deficit of May.
Exports were down 6.7 percent on year, missing forecasts for a drop of 5.4 percent following the 7.4 percent drop in the previous month. Imports were down an annual 5.2 percent versus forecasts for a drop of 0.2 percent following the 1.5 percent decline a month earlier.
Japan will also provide June figures for Tokyo condominium sales today.
In the currency market, the U.S. dollar is trading in the upper 107 yen range on Thursday.
On Wall Street, stocks closed lower on Wednesday, extending losses from the previous session following the release of a Commerce Department report showing a bigger than expected drop in housing starts as well as a nosedive in building permits. Trading activity was somewhat subdued as traders stuck to the sidelines as they wait for the earnings season to pick up steam being making more significant bets.
The Dow fell 115.78 points or 0.4 percent to 27,219.85, the Nasdaq dropped 37.59 points or 0.5 percent to 8,185.21 and the S&P 500 slid 19.62 points or 0.7 percent to 2,984.42.
The major European markets also moved to the downside on Wednesday. The French CAC 40 Index slumped by 0.8 percent, the German DAX Index slid by 0.7 percent and the U.K.'s FTSE 100 Index dropped by 0.6 percent.
Crude oil prices drifted lower on Wednesday after official data from U.S. Energy Information Administration showed a drop in crude oil stockpiles but a big jump in gasoline supply. WTI crude oil for August delivery slid $0.84 or about 1.5 percent to $56.78 a barrel.
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