Japan Stocks Fall After Economy Contracts, Other Markets Up

A man walks past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo, Monday. (AP Photo/Eugene Hoshiko)

Japanese stocks sank while other Asian markets gained Monday after Japan reported a record economic contraction amid the coronavirus pandemic.

Investors in Asia looked ahead to central bank meetings this week in China, Indonesia and the Philippines, with few other market-moving events in sight.

The Nikkei 225 in Tokyo fell 0.7% to 23,128.35 after data showed the world’s third-largest economy shrank 27.8% from a year earlier in the three months ending in June. That was bigger than the country’s deepest decline during 2008-09 financial crisis.

“The road ahead looks choppy as a resurgence in Covid cases will weigh on domestic and overseas spending,” Stefan Angrick of Oxford Economics said in a report.

The Shanghai Composite Index rose 2.3% to 3,436.30 and Hong Kong’s Hang Seng gained 1.3% to 25,505.82. South Korean markets were closed for a holiday.

The S&P-ASX 200 in Sydney shed 0.7% to 6,086.20 while India’s Sensex opened less than 0.1% higher, at 37,920.60. New Zealand and Singapore advanced.

Wall Street ended last week little changed.

The benchmark S&P 500 index declined less than 0.1% to 3,372.85, near its record high. The Dow Jones Industrial Average gained 0.1% to 27,931.02. The Nasdaq composite dipped 0.2% to 11,019.30.

Economists say consumer spending could be under more pressure after government aid including additional $600 weekly unemployment benefits expired. Investors are counting on Washington for another economic lifeline, but legislators are far apart on a possible package.

In energy markets, benchmark U.S. crude gained 35 cents to $42.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 23 cents on Friday to settle at $42.01. Brent crude, the standard for international oil prices, added 31 cents to $45.11 per barrel in London. It 16 cents the previous session to $44.80.

The dollar rose to 106.62 yen from Friday’s 106.59 yen. The euro gained to $1.1856 from $1.1843.