Asia Pacific stocks took a nosedive on Tuesday amid Delta variant fears. Japan’s Nikkei 225 index fell nearly 1% after the release of the country’s Consumer Price Index (CPI). Australia’s ASX 200 index edged lower after the release of the RBA Meeting Minutes. Hong Kong’s Hang Seng index recorded the most losses followed by the mainland Chinese stocks, Shanghai Composite and Shenzhen Component.
Japan’s Economic Concerns
According to the government’s monthly economic assessment, Japan’s economy remains weak. The Covid-19 virus as well as measures to curb the virus has heavily weighed on the consumption in July. Tokyo is in its fourth state of emergency due to the virus.
The Nikkei 225 index slipped despite a rise in the country’s CPI for June. The National annual core Consumer Price Index for June edged 0.2% higher in June. This was the fastest annual rate in a year.
The increase in the core Consumer Prices was driven by higher energy costs. However, the increase was smaller compared to other major economies due to the weak consumption. With the economy struggling to be on its feet again, the Bank of Japan (BOJ) will be forced to maintain its stimulus.
The advance in core Consumer Price Index excluding volatile fresh food prices hit its 0.2% forecast up from a 0.1% increase in May. This was the fastest increase rate since March 2020. Energy prices jumped 4.6% while gasoline costs rocketed 17.9%.
The BOJ scaled down its economic growth forecast for the fiscal year ending March 2022. This was due to the state of emergency and strict lockdown restrictions in some parts of the country to help curb the spread of the virus.
Nikkei 225 Movers
Electronic companies were the best performers in the Nikkei 225 index. Canon led the gains in the index. The Japanese optical products company gained more than 7.66% in its stock earnings. The company announced its plans to support photographers during the Tokyo Olympic Games.
Seiko Epson company was among the top performers in the index. the electronics company gained 4.49% in its stock earnings. Epson announced on Monday the integration of In-line solutions to the UV inkjet digital label press.
Nikon Corporation was up 2.78% on Tuesday. The Japanese optical products company announced its plans to begin shipping the Nikon Z FC as soon as July 23 amid rumors that the company will announce Nikon Z 9 in November-December.
On the flipside, Impex Corporation was the worst performer in the index. The energy company fell by 4.54%. Other laggards include CyberAgent Inc, Dentsu Inc, and Sumitomo Chemical Ltd. Each declined by 3.97%, 3.95% and 3.88% respectively.