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Japan’s Nikkei Retreats from 5-Month Peak, Set to Rise Nearly 20% for Year

A pedestrian walks past an electronic board showing the closing numbers on the Tokyo Stock Exchange, with graphs illustrating the daily movement (L) and for the last 12 months (R), along a street in central Tokyo on December 30, 2024. (AFP)
A pedestrian walks past an electronic board showing the closing numbers on the Tokyo Stock Exchange, with graphs illustrating the daily movement (L) and for the last 12 months (R), along a street in central Tokyo on December 30, 2024. (AFP)
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Japan’s Nikkei Retreats from 5-Month Peak, Set to Rise Nearly 20% for Year

A pedestrian walks past an electronic board showing the closing numbers on the Tokyo Stock Exchange, with graphs illustrating the daily movement (L) and for the last 12 months (R), along a street in central Tokyo on December 30, 2024. (AFP)
A pedestrian walks past an electronic board showing the closing numbers on the Tokyo Stock Exchange, with graphs illustrating the daily movement (L) and for the last 12 months (R), along a street in central Tokyo on December 30, 2024. (AFP)

Japan's Nikkei share average retreated from the previous session's five-month high on Monday, the last trading day in 2024, as investors locked in profits on a market set to be up a fifth for the year.

The Nikkei had fallen 0.75% to 39,979.68 by the midday break, after opening 0.11% higher. It ended at a five-month closing high on Friday after a three-session winning streak.

The index is up 19.5% so far this year, putting it just behind Pakistan and Taiwan for the year.

The broader Topix was down 0.42% to 2,789.98.

"Investors sold stocks today because they could not find clear reasons for the Nikkei to cross the 40,000 levels," said Fumio Matsumoto, chief strategist at Okasan Securities.

"But that does not mean investors are pessimistic about the market in the coming year. They may just want to avoid risks during the market close in Japan for the new year, which is longer than usual."

The Japanese markets will reopen on Jan. 6 after closing for the new year holidays from the next session.

Chip-testing equipment maker Advantest fell 3.83% to drag the Nikkei the most.

Nissan Motor slipped 5.64% to become the biggest percentage loser on the Nikkei. Nissan's shares surged nearly 40% this month as merger talks between the automaker and peer Honda Motor surfaced.

Makino Milling Machine's shares were untraded and were set to a daily limit of 10,750 yen after a surprise unsolicited takeover bid by Japanese manufacturing giant Nidec.

Takehiko Masuzawa, trading head at Phillip Securities Japan, said the Nikkei rose last week as investors bought back stocks to cover their short positions ahead of the long market holiday.

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Business

Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.