Japanese Stocks Fall after Yesterday’s Bullish Trading

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Japanese Stocks Fall after Yesterday’s Bullish Trading
Japanese Stocks Fall after Yesterday’s Bullish Trading

Japanese Stocks Fall after Yesterday’s Bullish Trading

When things were going better yesterday and investors and traders started seeing positive movement this week in the Asian market, the stocks fell, trimming the best two-month rally for the regional benchmark gauge since the start of 2012. This is happening amidst the speculation that the Federal Reserve may start paring stimulus sooner than previously forecast.

Major Losers

Today’s major lose was Honda Motor Co. which lost 0.6 percent. The company which claims to be Japan’s third-largest carmaker recently brought up its quarterly report for the second-quarter could not meet the estimates from investors and due to that its shares fell remarkably. The fall in motorcycles sales in Southeast Asia was a reason behind low profits.

Another major loser in today’s trading is Alacer Gold Corp. which sank 4.1 percent in Sydney. The falling prices of gold are a major reason behind its slower growth and consequent dismal performance in stock market. A similar trend was seen in the share of National Australia Bank Ltd. (NAB) which retreated 2.3 percent.

A major reason behind the fall of NAB’s share is attributed to an increase in expenses that climbed. Two major companies in Japan, Mitsubishi Heavy Industries Ltd. and Japan Airlines Co. are going to release their reports today, and may see a boost in sales and profit thatcould fuel the stock market tomorrow.

A similar trend was seen in China’s Shanghai Composite which declined 0.7 percent after the nation’s top four banks came up with reports that showed that they have been able to profit.

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Indexes Drop

Whereas Japan’s Topix index lost 0.3 percent amidst the news that the Bank of Japan maintained its campaign of unprecedented monetary stimulus, the MSCI Asia Pacific Index dropped 0.4 percent to 142.63 as of 12:25 p.m. in Hong Kong. Fall in MSCI Asia Pacific Index is due to eight of the 10 industry groups retreating.

Earlier, the Bank of Japan Governor Haruhiko Kuroda’s board kept a pledge to expand the monetary base by $711 billion a year. There is a lot of speculation on the tapering of stimulus by the Fed and investors are still worried about the quantum despite the fact that the Fed has already realized that fiscal policy is “restraining economic growth.”

Market analysts believe that stimulus will continue but tapering is inevitable. In fact, a lot of market analysts believe that the odds of the Fed starting to taper its stimulus in January have increased a lot.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com