Nikkei Closes Lower After Weak Tankan Survey

Tokyo stocks fell Wednesday, with the Nikkei index closing at the lowest level in three weeks, as weaker-than-expected business confidence among big manufacturers in a Bank of Japan survey dealt a blow to investor sentiment.

On the first day of fiscal 2015, the 225-issue Nikkei Stock Average ended down 172.15 points, or 0.90 percent, from Tuesday at 19,034.84. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 14.12 points, or 0.92 percent, lower at 1,528.99.

The BOJ’s quarterly Tankan survey released before the open showed business confidence among large companies such as auto and electronics makers unchanged from three months prior, against market forecasts for slight improvement.

The results also showed that big companies in all industries plan to cut capital spending on average this fiscal year, against forecasts for a slight increase.

The Nikkei briefly tumbled nearly 280 points to fall below 19,000 in the morning.

“Of course, it’s a reaction to the Tankan. The results were pretty bleak in most industries,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co.

Automaker issues in particular were lower after the BOJ report and as the yen strengthened against the U.S. dollar. Toyota Motor fell 147 yen, or 1.8 percent, to 8,236 yen and Nissan Motor was down 25 yen, or 2.0 percent, to 1,199 yen.

Key indexes went through fits of loss-paring and more declines throughout the day, swinging between buying and selling for gains at the start of the new fiscal year.

Looking ahead, analysts said investors will be closely watching Friday’s U.S. jobs report for clues to the strength of the world’s largest economy and the timing of an upcoming Federal Reserve interest rate hike.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza