(RTTNews) - The Japanese stock market closed sharply lower on Friday, snapping a three-day winning streak. The market opened lower on profit taking following Thursday’s rally and extended its losses in a late sell-off despite the Bank of Japan cutting its short-term interest rate for the first time in seven years. The financial markets in Japan will remain closed on Monday for a Culture Day national holiday.

The benchmark Nikkei 225 Stock Average plunged 5.0% or 452.8 points to 8,577, well below the key 9,000 level. The broader Topix index of all first-section issues also fell 32.3 points or 3.6% to close 867.1. Despite Friday’s drop, stocks ended in positive territory for the week following the U.S. Federal Reserve’s rate cut and a weaker yen. For the week, the Nikkei has gained a record 12% and the Topix rose 7%.

The Bank of Japan trimmed its key interest rate to 0.3% from a decade-high 0.5%, though the cut was by a split vote and was smaller than the market had expected. The move came under government pressure to join the global response to the worst financial crisis in 80 years.

In the currency market, the U.S. dollar was quoted in the upper 96-yen levels in late Tokyo deals, down from the lower 98-yen levels in early trade and the upper 98-yen range late Thursday.

U.S. stocks closed higher Thursday following the Commerce Department’s report that the U.S. GDP fell 0.3% in the third quarter, lower than the analysts’ expectation for a 0.5% decline. The Dow closed up 190 points or 2.1% at 9,181, the Nasdaq gained 41 points or 2.5% to 1,699, and the S&P 500 advanced 24 points or 2.7% to 954.

Oil fell for a second day on Friday, dropping nearly 3%, and is set for its biggest monthly loss after weak U.S. GDP data refocused attention on falling demand. Oil was quoted at $64.10 a barrel, down $1.86 or 2.82%, by 3:08 a.m. ET after the contract for December delivery settled down $0.79 at $65.40 on Thursday in U.S. trading.

Among a raft of economic released today, the Ministry of Internal Affairs and Communications said that core consumer prices in Japan rose 2.3% on year in September, moving higher for the twelfth consecutive month. Core CPI, excluding volatile fresh food prices, was in line with analyst expectations and follows a 2.4% annual expansion in August. Overall inflation was unchanged in September at 2.1%, in line with forecasts.

Tokyo core CPI for October, considered a leading indicator for the nationwide trend, climbed 1.5% on year after a 1.7% annual increase in the previous month. Overall Tokyo inflation was up an annual 1.2% versus expectations for a 1.3% climb and following a 1.4% gain a month earlier. Minus food and energy costs, Tokyo CPI was up 0.4% after a 0.5% annual gain a month earlier.

Activity in Japan’s manufacturing sector contracted in October for the eighth straight month, according to the latest survey from Nomura Holdings and the JMMA. The group’s Purchasing Managers Index dropped to a seven year low of 42.2 in October, lower than the 50.0 reading that separates contraction in the sector from expansion. The accompanying PMI industrial production index fell in October to 39.7, also the lowest since December 2001.

Meanwhile, unemployment in Japan decreased slightly in September, according to data from the government released on Friday. The nation’s seasonally adjusted jobless rate hit 4.0%, down from 4.2% in August. Most economists had forecast the jobless rate to stay at 4.2%.

Banks closed mixed. Mitsubishi UFJ Financial Group plunged 5.4% and Mizuho Financial Group tumbled 5.2%, while Sumitomo Mitsui Financial group advanced 4.7%. Top brokerage Nomura Holdings plummeted 6.1%.

Among exporters, Canon surged 9.9% and machinery maker Komatsu jumped 10.5%, but Honda Motor plunged 13.0%, Sony fell 2.8%, Toyota Motor shed 4.4%. Mazda slumped 13.8% after it lowered its profit outlook on Thursday.

In the tech space, Advantest gained 1.3%, but Fanuc sank 11.4%, Fujitsu dropped 6.9%, and Kyocera slid 4.9%.

Among commodity-related stocks, Inpex Holdings rose 1.3%, while Nippon Oil tumbled 11.7% and Nippon Mining Holding fell 6.8%. Trading house Mitsubishi Corp plummeted 11.1% and Mitsui & Co slipped 1.0%.

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Posted in Categories: Economy, Japan, Releases, USA.

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