Views Article – Sharenet Wealth

Asia, News

Japanese shares fall as household spending slumps; SoftBank Group soars

TOKYO, July 7 (Reuters) – Japanese shares edged lower on Tuesday after data showed that domestic household spending had dropped at the fastest pace on record in May during the coronavirus-led lockdown, pushing the world’s third-largest economy deeper into decline.

Despite positive cues from Wall Street, the benchmark Nikkei average was down 0.56% at 22,587.73 by the midday break, a day after the index marked its highest close since June 10.

U.S. stocks saw sharp overnight gains, with Nasdaq hitting an all-time high on strong services industry activity in June along with investor optimism about a revival in China’s economy.

Data showed that U.S. services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels, but a resurgence in coronavirus cases that has forced some restaurants and bars to close again threatens the emerging recovery.

Closer home, Japan’s household spending had slumped 16.2% in May at the quickest pace on record, with the coronavirus outbreak leading to large cuts in spending on hotels, transportation and eating out.

The broader Topix inched down 0.48% at 1,569.54 by the recess.

All but seven of the 33 sector sub-indexes on the Tokyo Stock Exchange were in negative territory, steel makers , drugmakers and banks leading the losses.

Department store operator Takashimaya Co Ltd slipped 2.64% after the company reported a net loss of 20.53 billion yen in the March-May quarter, with sales nearly halving from the previous year.

Bucking the overall weakness, Nikkei heavyweight SoftBank Group Corp climbed 3.26% after the company’s massive buybacks, reaching levels unseen since during the dot-com bubble in early 2000.

(Reporting by Eimi Yamamitsu, Editing by Sherry Jacob-Phillips)


© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.