The Japanese stock market concluded its week on a downward trend, breaking a four-day winning streak that had seen an increase of over 750 points, equivalent to 1.9%. The Nikkei 225 Index now hovers just above the 39,470 mark, with expectations of a slight decline as the new week begins.
Looking ahead, global indicators point to minimal movement in Asian markets as investors anticipate the Federal Open Market Committee (FOMC) meeting later this week. European and U.S. markets largely experienced minor setbacks, a sentiment likely to be mirrored in Asia.
On Friday, the Nikkei 225 experienced a modest decline, primarily impacted by losses in financial and technology sectors, although performance in the automotive sector was mixed. The index dropped by 378.66 points, or 0.95%, settling at 39,470.44 after fluctuating between 39,247.41 and 39,734.99.
Key market players saw varied performance: Nissan Motor declined by 0.36%, while Mazda Motor gained 0.56%. Toyota Motor and Honda Motor fell by 0.77% and 0.50% respectively. Softbank Group slightly decreased by 0.16%, Mizuho Financial fell by 0.78%, Sumitomo Mitsui Financial dipped by 1.05%, Mitsubishi Electric plummeted by 2.39%, and Sony Group dropped by 3.00%. Panasonic Holdings saw a slight decline of 0.13%, Hitachi decreased by 1.50%, with Mitsubishi UFJ Financial remaining stable.
Wall Street indicated a mild downturn towards the week's close. While Friday opened on a high note, major indices soon dipped, though the NASDAQ managed to recover into positive territory by day’s end. The Dow Jones Industrial Average lost 86.04 points, closing at 43,828.06, the NASDAQ gained 23.92 points to end at 19,926.72, and the S&P 500 saw a marginal decrease of 0.16 points, concluding at 6,051.09. Over the week, the NASDAQ increased by 0.3%, the S&P 500 decreased by 0.6%, and the Dow experienced a significant drop of 1.8%.
Initial optimism on Wall Street was buoyed by Broadcom's (AVGO) better-than-expected fiscal fourth-quarter earnings, along with its optimistic outlook on continued demand for its AI chips. However, enthusiasm waned as traders focused on the upcoming Federal Reserve meeting. The Fed is anticipated to reduce interest rates by 25 basis points, with market participants closely watching for signals on future rate directions.
Meanwhile, oil futures experienced a rise on Friday, amid renewed supply concerns following additional sanctions imposed on Iran and Russia. West Texas Intermediate Crude oil futures for January settled up by $1.27, approximately 1.8%, at $71.29 per barrel.
In domestic news, Japan is set to release October data for core machine orders later in the day. In September, these orders recorded a monthly decline of 0.7% and an annual decrease of 4.8%. Additionally, preliminary December results for services and manufacturing PMIs, provided by Jibun Bank, are expected; in November, these figures stood at 50.5 and 49.0, respectively.
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