Japan’s Nikkei Trades Lower Over Concerns About Impact on Earnings - Forex News by FX Leaders
Japan's Nikkei Trades Lower Over Concerns About Impact on Earnings

Japan’s Nikkei Trades Lower Over Concerns About Impact on Earnings

Posted Monday, April 13, 2020 by
Arslan Butt • 1 min read

Japanese stock markets started the new trading week on a bearish footing, sliding lower amid escalating fears about the impact of the coronavirus pandemic on companies’ earnings. By midday trading, Nikkei was down by over 2%, even though it received some respite with stocks of oil companies rising on news about OPEC+ confirming additional production cuts.

The extended Easter holiday weekend in some markets, however, kept trading volumes lower by as much as 50% early on Monday. So far, multiple Japanese companies have postponed their corporate earnings announcements as they try to estimate the economic impact of the pandemic.

Shutdowns, travel restrictions, supply chain disruptions and an overall decline in consumer consumption, both domestic and external, are likely to weigh heavily on companies’ revenues in Q1 and Q2 2020. This sentiment has kept stock markets around the world in a panic selling mood in recent weeks, and NIKKEI225 has also experienced similar moves as a result.

Japan especially faces a higher risk of falling into deep recession this year, especially after its GDP contracted unexpectedly in Q4 2019 as well.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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