Japan Stocks hit a seven-month low

Japan stock market finished session at lowest level in seven-month on Thursday, 19 August 2021, as risk aversion selloff triggered amid uncertainty over Federal Reserve policy moves and concerns that the fast-spreading Delta variant of COVID-19 could delay an economic recovery, with report that Toyota Motor plans to slash its global output by 40% next month due to chip shortages intensified selloff in the market.

At closing bell, the 225-issue Nikkei Stock Average fell 304.74 points, or 1.1%, to 27,281.17. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 26.78 points, or 1.39%, to 1,897.19.

Trading volume turnover in the 1st section increased to 1076 million shares from 946 million shares in previous session. Trading value turnover increased to 2384.10 billion yen from 2180.84 billion yen in previous session.

Total 31 of 33 sectors sub-indexes on the Tokyo exchange ended down, with bottom performing sectors were Iron & Steel (down 5.3%), Marine Transportation (down 4.1%), Mining (down 3.5%),Transportation Equipment (down 3.5%), Oil & Coal Products (down 3.4%), and Nonferrous Metals (down 3.1%), while top performing sector was Pharmaceutical (up 1.4%).

Tokyo stocks commenced trading with a back-foot after the U.S. Federal Reserve's July min'utes released overnight showed most officials expect stimulus tapering can be started this year, earlier than market expectations.

Meanwhile, selloff pressure fuelled further on concerns that the fast-spreading Delta variant of COVID-19 could delay an economic recovery. Tokyo confirmed 5,534 new cases of COVID-19 on Thursday, topping the 5,000 mark for the second straight day as infections continue to rise across the nation due to the spread of the highly transmissible delta variant. The daily number of new COVID-19 cases in Japan topped 23,000 for the first time on Wednesday with 23,918 cases, eclipsing its previous record of 20,361 marked Friday.

Also weighing on the sentiments was a report that Toyota Motor plans to slash its global output by 40% next month due to chip shortages. Microchips have been in short supply since the end of the last year due to the impact of the COVID-19 pandemic. When the pandemic hit in early 2020, automobile manufacturers had scaled back orders, while the chipmakers had focused their output on consumer electronics as people needed more devices to deal with staying at home during lockdowns. This left automobile manufacturers in a tight spot as demand for vehicles picked up again. The outbreak of the Delta variant of the coronavirus across Southeast Asia has also impacted the automaker's procurement process for auto parts.

CURRENCY NEWS: The Japanese yen traded at 109.63 per dollar, still weaker than levels below 109.5 seen against the greenback earlier this week.

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