Thursday, October 28

Japanese shares slump to one-month low as supply fears widen

Article content

TOKYO — Japanese shares tumbled on Friday to one-month lows on mounting fears various supply chain disruptions worldwide could keep inflation elevated for a much longer period.

By late morning trade, Nikkei average lost 1.91% to 28,879.01 while the broader Topix fell 2.09%, erasing the gains made after Prime Minister Yoshihide Suga offered to resign on Sept. 3.

For the week, the Topix lost 4.9% so far, on course to post its biggest weekly loss since the market crashed after the coronavirus outbreak in early 2020.


Article content

“Sentiment is very weak. Investors are starting to fear inflation is not temporary given various supply constraints. That means their economic scenario needs a major review,” said a strategist at a Japanese brokerage who declined to be named as he is not authorized to speak to media.

Price pressure is rising globally due to staff shortages, lack of ships, soaring gas prices in Europe and power shortage in China.

Nitori lost 5.9% after the furniture store chain operator missed markets’ top line forecast in its quarterly results.

Sumitomo Chemical lost 4.6% after its profit estimate for the quarter ended September fell short of market expectations.

Silicon wafer manufacturer Sumco lost 3.2% after it unveiled a plan to sell 128 billion yen ($1.14 billion) of new shares to fund an increase in silicon wafer production.


Article content

The shares that were added to Nikkei average on Thursday dropped sharply in a reaction to gains prior to the inclusion.

Nintendo lost 5.2% while Murata Manufacturing shed 4.6% and Keyence, Japan’s second-biggest company by market capitalisation, fell 2.4%.

Bucking the trend, Toshiba gained 3.3% after activist US hedge fund Elliott Management said it owns a “significant” stake in the Japanese industrial conglomerate.

Rakuten gained 3.1% after the e-commerce firm said it is preparing to list its online banking unit.

Gree were untraded with glut of bids and looked set to hit limit-high at close after the game company announced a massive share buyback.

The market showed no reaction to the Bank of Japan’s tankan business sentiment data.

(Reporting by Hideyuki Sano; Editing by Sherry Jacob-Phillips)


In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.


    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

    Leave a Reply

    Your email address will not be published. Required fields are marked *