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Asian Stocks Slip; Nikkei 225 drops more than 2% Despite Tankan Business Survey Data

Shares in Asia-Pacific slipped in Friday trade, with Japanese markets among the region’s biggest losers.

In Friday afternoon trade, the Nikkei 225 fell 2.31% to close at 28,771.07 while the Topix index shed 2.16% to finish the trading day at 1,986.31.

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The Nikkei 225 index, technical performance chart.

The sentiment at Japan’s large manufacturers improved in the three months to September, according to the Bank of Japan’s quarterly tankan business sentiment survey released Friday. The headline index for large manufacturers’ sentiment came in at plus 18 — an improvement over the previous quarter’s reading of plus 14.

Wisdomtree’s Jesper Koll said the data release showed that Japan’s large manufacturers are “very competitive globally.”

“It’s good news because these disruptions from the delta variant and the disruptions on the supply chain you know, according to the Tankan, don’t seem to be that much of a negative so that spells good news in terms of coming upward revisions to corporate profitability,” Koll, senior advisor at the firm, told journalists during a media briefing on Friday.

Elsewhere, Australian stocks also notched heavy losses, with the S&P/ASX 200 closing 2% lower at 7,185.50 while Taiwan’s Taiex plunged 2.15% on the day to 16,570.89.

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Australia’s S&P ASX 200 index, one-year technical performance chart.

South Korea’s Kospi dipped 1.62% to close at 3,019.18. In Southeast Asia, the Straits Times index in Singapore declined about 1%, as of 3:08 p.m. local time.

MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.97%.

Markets in Hong Kong were closed for a holiday on Friday, while those in mainland China are closed for the Golden Week holiday from Friday till October 7.

Overnight stateside, the Dow Jones Industrial Average dropped 546.80 points to 33,843.92 while the S&P 500 shed 1.19% to 4,307.54. The Nasdaq Composite slipped 0.44% to 14,448.58.

Those losses on Wall Street saw the S&P 500 suffering its worst month since March 2020, when the pandemic sparked a major market sell-off.

Asian Markets Currencies & Oil.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 94.283 following a rise from below 94 earlier this week.

The Japanese yen traded at 111.05 per dollar, stronger than levels around 112 seen against the greenback yesterday. The Australian dollar changed hands at $0.7197, against an earlier high of $0.724.

Oil prices were lower in the afternoon of Asia trading hours on Friday, with international benchmark Brent crude futures falling 0.2% to $78.15 per barrel. U.S. crude futures declined 0.24% to $74.85 per barrel.

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