Japan Stocks Little Changed as China Exports Falter, Yen Rises

  • China’s September exports fell 5.6 percent, trailing estimates
  • Yen reverses earlier losses against dollar; exporters decline

China Exports Remain Sluggish Amid Pressure on Yuan

Japanese shares ended little changed after erasing gains following Chinese export data that underscored slowing global demand. The reversed losses against the dollar, weighing on the earnings prospects of exporters.

The Topix index was virtually unchanged at the close in Tokyo, paring a gain of as much as 0.9 percent earlier. The yen rose against the dollar as China reported surprisingly weak September trading data, spurring concern over the outlook for the global economy and increasing demand for safer assets. Minutes from the Federal Open Market Committee meeting in September showed the decision to wait before raising U.S. interest rates was a “close call.”

“It seems to be a mixture of reasons,” said Takuya Takahashi, a Tokyo-based senior strategist at Daiwa Securities Co. “The yen was slightly strengthening when the yuan became weaker, and then the Chinese trade data was in focus, with exports decreasing instead of increasing.”

SecurityPercent ChangePrice
Topix-0.00%1,342.31
Nikkei 225-0.4%16,774.24
Yen-Dollar+0.4%103.78

China’s September exports fell 5.6 percent against estimates of 2.5 percent growth, while imports grew 2.2 percent against expectations of 5.5 percent expansion.

Traders kept their bets on the possibility of a rate increase by the end of the year steady, at 68 percent, following the release of the FOMC meeting minutes.

Energy producers led declines on the Topix, as Showa Shell Sekiyu KK and Idemitsu Kosan Co. both fell at least 4 percent after the Nikkei newspaper reported that the companies decided this morning to delay a merger that had been planned for April 2017. Showa Shell was the biggest decliner on the Nikkei 225 Stock Average, followed by Kobe Steel Ltd., which dropped 3.3 percent as steelmakers slumped.

  • Toyota Motor Corp. and Suzuki Motor Corp. rose 0.2 percent and 2.2 percent, respectively, after announcing Wednesday they will be exploring a partnership. The alliance bodes well for the medium-term growth prospects of both companies, Nomura Holdings Inc. analyst Masataka Kunugimoto wrote in a note released Wednesday.
  • Nousouken Corp. rose 2.4 percent after the agricultural product platform provider gave an operating profit growth forecast of 8.6 percent for the year ending August.

Futures on the S&P 500 Index fell 0.6 percent following the release of the Chinese figures. The underlying equity gauge rose 0.1 percent on Wednesday as investors took some comfort from the measured tone on the pace of further U.S. rate tightenings in the Fed minutes.

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