The Tokyo stock exchange closed slightly lower on Monday. Elsewhere in the Asian region, major equity markets also declined for the most part. Investors took advantage of disappointing growth in the Chinese economy to profit after the recent strong rally.
Better-than-expected retail sales in China limited losses. Concerns about the financially distressed Chinese real estate developer Evergrande also eased after reassuring words from the Chinese central bank.
The Nikkei in Tokyo ended 0.2 percent in the minus at 29,025.46 points. On Friday, the main index gained almost 2 percent. Toyota was one of the strongest climbers with a plus of more than 2 percent. The largest Japanese car manufacturer announced that it would also cut production in November due to shortages of chips and other parts in the car sector.
However, investors were relieved that Toyota is sticking to its production target of 9 million cars for the entire fiscal year, which runs until the end of March. Oil companies also made progress thanks to the continued rise in oil prices. Inpex added 5 percent.
The main index in Shanghai was down 0.4 percent in the meantime. Figures from the Chinese government showed that the second-largest economy in the world grew by 4.9 percent in the third quarter. That was the lowest growth in a year. In addition, the Chinese economy suffered power outages in the past quarter due to energy shortages, supply problems and local outbreaks of the coronavirus.
The weak growth did, however, raise hopes for more stimulus from the Chinese government. Production from the country’s sizeable industry was also lower than expected in September, while retail sales showed a stronger-than-expected increase.
The Hang Seng index in Hong Kong lost 0.6 percent. Chinese real estate companies mainly were up. Bank of China Governor Yi Gang said that defaults due to “mismanagement” by some companies pose a challenge to the Chinese economy. Still, authorities will be careful not to endanger the entire financial system.
On Friday, another executive of the People’s Bank of China said the problems at real estate developer Evergrande are isolated and manageable. Other real estate companies in the country are stable.