Headline shares of the Japan share market declined on Friday, 26 July 2019, as investors elected to book profit made in previous three sessions on following a weak lead from Wall Street overnight, mixed earnings reports, and concerns that the Fed may be less aggressive than expected on monetary policy when it meets next week. Total 26 subsectors out of 33 subsectors of the Topix's index declined, with Nonferrous Metals, Machinery, Textiles & Apparels, Transportation Equipment, and Marine Transportation issues being notable losers. Around late afternoon, the 225-issue Nikkei Stock Average dropped 105.51 points, or 0.5%, to 21,651.04, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange sank 6.64 points, or 0.42%, at 1,571.21.
Wall Street fell from record highs on Thursday following a flurry of downbeat quarterly results from Ford Motor and other companies and after European Central Bank chief Mario Draghi's comments disappointed investors hoping for a more dovish stance on monetary policy. The Nasdaq Composite tumbled 1% to 8,238.54. The Dow Jones Industrial Average dipped 0.47% to end at 27,141.05 points, while the S&P 500 lost 0.53% to 3,003.7.
Concerns are rising that the Fed may be less aggressive than expected on monetary policy when it meets next week.
That came after European Central Bank (ECB) President Mario Draghi said the risk of a recession in the region was low despite earlier signalling a rate cut and more monetary easing ahead. The ECB signaled its intention to explore monetary easing but did not cut interest rates, and President Mario Draghi sounded more upbeat on the economy than investors expected. Some traders took this to mean the central bank would not be as aggressive in its easing measures and that the Fed could follow suit when it meets next week.
The Federal Reserve is widely expected to cut interest rates next week to bolster the U. S. economy, even as the U. S. unemployment rate sits at its lowest in 50 years.
Back to home, shares of automaker Nissan Motor dropped more than 2.5%, after the company announced Thursday it would slash 12,500 jobs worldwide following a 95.5% drop in its first-quarter operating profit.
CURRENCY NEWS: The Japanese yen, widely viewed as a safe-haven currency, traded at 108.61 against the dollar after weakening sharply from levels below 108.4 in the previous session.
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