Japan Stocks extend losses on mounting pandemic fears

Japan share market finished lower for third straight session on Thursday, 29 October 2020, as risk aversion selloff continued amid concerns over the pace of the global economic recovery from the COVID-19 pandemic after sharp increases in coronavirus cases in the United States, particularly in the Midwest and announcements by the German and French governments of new lockdown measures. However, market losses capped on the back of robust earnings results from some companies, including tech giant Sony.

At closing bell, the 225-issue Nikkei Stock Average declined 86.57 points, or 0.37%, to 23,331.94. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 1.62 points, or 0.1%, to 1,610.93.

Total 24 issues of 33 industry category of Topix index ended into red territory, with Securities & Commodities Futures, Land Transportation, Oil & Coal Products, Electric Power & Gas, Warehousing & Harbor Transportation Services, Chemicals, and Services issues being notable losers, while Electric Appliances, Transportation Equipment, Real Estate, and Pharmaceutical issues were notable gainers.

Market mood dented amid renewed concerns over the pace of the global economic recovery from the pandemic after alarming rise in novel coronavirus cases in some European countries and the United States. Twelve U.S. states set records for hospitalized COVID-19 patients, while Germany and France announced plans to shut large swathes of public life for a month as the pandemic surged across Europe.

The U.S. has averaged more than 70,000 new coronavirus cases a day over the past week, with 29 states setting new records this month for the most new daily cases since the pandemic began in February. More than 8.78 million cases have been reported nationwide and at least 226,000 people have died of COVID-19, according to data from John Hopkins University (JHU). According to JHU, the average number of daily new cases this past week is up 21% compared to the previous week. The jump in new infections has also been accompanied by an increase in hospitalizations and deaths, leading to worries about new lockdowns.

In Europe, Germany and France announced tough new restrictions on businesses Wednesday in a bid to stem the spread of the coronavirus as the countries deal with worsening outbreaks.

Railway operator JR Central and restaurant booking website operator Gurunavi succumbed to heavy selling pressure stemming from their hefty operating loss estimates for the current business year ending next March. Among other major losers were Hitachi Construction Machinery and silicon wafer producer Shin-Etsu Chemical.

On the other hand, Sony surged 6.7% after revising up its operating and net profit projections for the same year. Game-maker Konami and pharmaceutical firm Daiichi Sankyo rose as well.

ECONOMIC NEWS: Japan Retail Sales Down 8.7% On Year In September- Japan retail sales was down 8.7% on year in September, coming in at 12.101 trillion yen, the Ministry of Economy, Trade and Industry said on Thursday, following the 1.9% drop in August. On a monthly basis, retail sales dipped 0.1% after climbing 4.6% in the previous month. Commercial sales were up 4.9% on month and down 12.8% on year at 43.691 trillion yen, while wholesale sales gained 3.1% on month and lost 14.8% on year at 31.590 trillion yen. For the third quarter of 2020, retail sales were up 8.4% on quarter and down 4.6% on year at 36.947 trillion yen.

Bank of Japan keeps monetary policy steady-- The Bank of Japan kept monetary policy steady on Thursday, in a widely expected decision. In the central bank's quarterly report, its median forecast for real GDP was revised downward to a 5.5% decline in fiscal year 2020. That compared against a median expectation of a 4.7% fall projected in the previous report in July.

CURRENCY NEWS: The Japanese yen traded at 104.23 per dollar, having strengthened from levels above 104.8 against the greenback earlier this week.

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