Tokyo stocks close lower on poor BOJ survey results, U.S. economy concerns-Xinhua

Tokyo stocks close lower on poor BOJ survey results, U.S. economy concerns

Source: Xinhua| 2022-07-01 18:34:32|Editor: huaxia

TOKYO, July 1 (Xinhua) -- Tokyo stocks closed lower Friday with the benchmark Nikkei stock index extending its losing streak to three days, as subpar results of the Bank of Japan's Tankan survey hurt sentiment amid ongoing concerns over the health of the U.S. economy.

The 225-issue Nikkei Stock Average dropped 457.42 points, or 1.73 percent, from Thursday to close the day at 25,935.62.

The broader Topix index, meanwhile, lost 25.78 points, or 1.38 percent, to finish at 1,845.04.

Local dealers said that Wall Street's overnight drop set a negative tone amid ongoing concerns the U.S. Federal Reserve's aggressive measures to combat inflation could tip the world's largest economy into recession.

These concerns, they added, were compounded by data showing the personal spending rate in the U.S. fell 0.4 percent in May from the previous month, down from an increase of 0.3 percent in April.

"Although the inflation rate fell within market consensus, personal spending growth landed below expectations, which has raised fears over stagflation, when economic stagnation and inflation take place at the same time," Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Research Institute, was quoted as saying.

Adding to a risk-off mood, business sentiment among large Japanese manufacturers deteriorated for the second straight quarter in June, owing to rising costs for energy and raw materials, the Bank of Japan (BOJ) said in its Tankan report Friday, analysts here highlighted.

Sentiment has also been hit but the yen's recent weakness against a basket of other major currencies, including the U.S. dollar and the euro, which has added to the cost to import raw materials, the prices of which themselves have been skyrocketing for businesses in resource-poor Japan, they added.

By the close of play, mining, rubber product, and electric power and gas issues comprised those that declined the most, with issues that fell outpacing those that rose by 1,485 to 308 on the Prime Market, while 45 ended the day unchanged.

Heavily weighted components dragged the broader market down, with Uniqlo owner Fast Retailing dropping 4 percent, while chipmaker Tokyo Electron fell 3.7 percent.

Trading houses lost ground due to geopolitical concerns, with Mitsui tumbling 5.5 percent, while Mitsubishi closed 5.4 percent lower.

Utilities retreated due to concerns of a power crunch as Japan has been hit but an unusually hot heatwave in June, with the government requesting a three-month period of energy conservation among businesses and households.

As such, Tohoku Electric Power lost 1.0 percent, while Kyushu Electric Power ended down 1.6 percent by the close.

Department store issues bucked the downward trend, however, owing to upbeat profits in the last quarter, with J.Front Retailing advancing 1.1 percent, while Takashimaya soared 8.8 percent.

On the Prime Market on Friday, 1,349.73 million shares changed hands, dropping from Thursday's volume of 1,364.02 million shares.

The turnover on the final trading day of the week came to 3,146.95 billion yen (23.21 billion U.S. dollars).