(RTTNews) - The Japanese stock market was trading sharply lower on Tuesday following the overnight losses on Wall Street and a stronger yen relative to the U.S. dollar. In addition, reports speculating an operating loss at Sony Corp. stoked concerns about disappointing earnings for Japanese companies.

At 7.22 P.M. ET, the benchmark Nikkei 225 Index was losing 369.71 points, or 4.18%, to 8,467.09 and the broader Topix Index of all First Section Issues was down 32.68 points to 822.34.

The Japanese markets were closed on Monday for a national holiday. On Friday, the stock market pared initial gains and closed lower for the second straight session. The Nikkei 225 Index declined 39.62 points, or 0.45% to close at 8,836.80, and the Topix Index of all First Section Issues closed down 5.87 points, or 0.68% to 855.02.

U.S. stocks extended losses on Monday amid concerns about the earnings season and as investors saw little to support a long-term rally.

Oil plunged below $38 per barrel on the New York Mercantile Exchange on Monday and finished at its lowest mark since Christmas Eve. Traders indicated they feel recent production cuts by the Organization of Petroleum Exporting Countries will not be enough to combat rapidly falling demand. Light sweet crude for February delivery ended the day at $37.59, down $3.24 on the session.

On the economic front, Japan’s Ministry of Finance said on Tuesday that the country’s unadjusted current account surplus for November was 581.2 billion yen, down 65.9% on year. The surplus was 960.5 billion yen in the preceding month of October and 1.7058 trillion yen in November of 2007. The unadjusted trade balance showed a deficit of 93.4 billion yen following a 145.8 billion yen surplus a month earlier and a 907.6 billion yen surplus a year earlier. Exports were down 26.5% on year, marking the largest decline on record, the Ministry said. Imports fell an annual 13.7%.

Later in the day, Japan is also scheduled to release December data for bank lending, M2 money supply and its economy watchers survey. M2 money supply is expected to come in flat from the previous month, higher by 1.7% on year. Adjusted bank lending was up an annual 4.1% in the previous month. M3 money stock is expected to remain flat at 0.6%. The eco watchers outlook survey saw a score of 24.7 in November, while the survey for current conditions came in at 21.0 and is expected to move up to 20.4.

In the currency market, the U.S. dollar was trading in the mid 89-yen range on Tuesday. In early trades, the dollar was quoted in a range of 89.45-89.48 yen, down 1.70 yen from Friday’s close of 91.15-91.17 yen in Tokyo.

In Tuesday’s trading, tech and export-oriented stocks were trading sharply lower. Advantest slumped 6.75%, Kyocera shed 5.48% and Tokyo Electron slid 6.31%. Tokyo Electron said that orders for its tools to make semiconductors, flat panel displays and solar panels dropped about 65% in the October-December period from the preceding quarter.

Among export-oriented stocks, Sony shed 8.20%. The Nikkei business daily reported that Sony is expected to report its first full-year operating loss in 14 years, of about 100 billion yen. In October, Sony had forecast an operating profit for the year. Meanwhile, Canon dropped 6.55% after the company’s chairman said that year-end holiday sales were disappointing. Komatsu fell 8.32% and Sharp declined 7.13%.

Electronics maker Panasonic said it will cut its investment in two new flat-screen TV plants by about $1.5 billion and exit unprofitable businesses amid the global economic slump. The company’s stock fell 6.62%.

In the banking space, Mitsubishi UFJ lost 4.81%, Mizuho Financial dropped 4.73%, Sumitomo Mitsui Financial fell 5.24% and Resona Holdings declined 2.33%. Among automakers, Toyota tumbled 5.70%, Honda lost 6.49%, Nissan shed 8.75% and Mazda lost 5.59%.

In the oil sector, Inpex plunged 9.30%, Nippon Oil slid 3.80% and Showa Shell dropped 4.00%. Trading house Mitsubishi slid 4.81%, Mitsui & Co. fell 7.89%, Marubeni tumbled 7.00% and Itochu shed 7.16%.

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

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