Japanese Stocks Suffered Losses on May 31

Stocks in Asia-Pacific were mixed on May 31, as investors reacted to the release of China’s official manufacturing Purchasing Managers’ Index for May. Japanese stocks closed lower on Monday. Mainland Chinese stocks closed higher, with the Shanghai composite gaining 0.41% to 3,615.48. The Shenzhen component added 0.966% to 14,996.38.

Hong Kong’s Hang Seng index dropped about 0.2%, as of its final hour of trading.

The world’s second-largest economy’s official manufacturing Purchasing Managers’ Index came in at 51.0. That compared against analyst expectations for a reading of 51.1. The May figure was also a slight decline from the previous month’s reading of 51.1. As a reminder, PMI readings above 50 represent expansion while those below signify contraction. PMI readings are sequential as well as represent month-on-month expansion or contraction.

South Korea’s Kospi dropped 0.48% higher at 3,203.92. In Australia, the S&P/ASX 200 fell 0.25% to end its trading day at 7,161.60.

Over in Southeast Asia, the FTSE Bursa Malaysia KLCI Index declined about 0.8% as of 3:05 p.m. local time. Those losses came as Malaysia is set for a nationwide total lockdown from June 1.14 following a spike in Covid infections all over the country.

Japanese stocks and coronavirus pandemic

Japanese stocks declined on May 31, as investors locked in gains after a recent rally, although losses were limited thanks to a positive finish from local drugmakers.

The Nikkei share average declined 0.99% to 28,860.08, while the broader Topix index dropped 1.26% to 1,922.98.

The Nikkei jumped 2.1% on Friday to close at the 29,000-level for the first time in several weeks, while Wall Street finished with marginal gains.

Japan started its inoculation drive in mid-February, later than other large economies. The country wants to vaccinate most of its elderly population before the start of the Tokyo Olympics on July 23.

Index heavyweights Fast Retailing and Softbank Group affected Nikkei, after declining 0.73% and 1.57% respectively.

Renesas Electronics Corp fell 5.51% after the company announced a sale of about $2 billion shares. The company is accumulating funds as it plans to buy Dialog Semiconductor.

Drugmakers strengthened their positions, with Astellas Pharma jumping 2.1% and Chugai Pharmaceutical gaining 0.45%. Astellas was the largest percentage gainer on the Nikkei, and in second place was Advantest followed by Yaskawa Electric.

The largest percentage loser on the Nikkei was NTN as it fell 4.95%, followed by Fukuoka Financial Group.