Nikkei Halts Multi-Day Rally Due to Growth Concerns

The stock exchange in Tokyo stopped the advance of the past few days on Thursday. Investors seized on concerns about a slowdown in the economic recovery due to the meteoric rise of the Delta variant of the coronavirus to take profits following the rally that followed the announced departure of Japanese Prime Minister Yoshihide Suga.

 

The interest rate decision of the European Central Bank, which will be announced later in the day, was also looked forward to.

The Nikkei in Tokyo ended 0.6 percent in the minus at 30,008.19 points. Since last Friday, the main index is up nearly 6 percent, reaching its highest level in six months. Prime Minister Suga then announced that he would not stand for election as the Liberal Democratic Party (LDP) leader. This fueled hopes that his successor would do more to boost the economy.

Energy company Tokyo Electric Power made a price jump of 11 percent. Japanese Minister Taro Kono, who is responsible for the vaccination program in the country, stated that he would allow the use of nuclear energy for the time being. Kono is seen as a possible successor to Prime Minister Suga and is known as a fierce opponent of nuclear energy. Tokyo Electric Power, also known as TEPCO, owns the Kashiwazaki Kariwa nuclear power plant, which was hit by an earthquake in 2007. In addition, the Fukushima nuclear power plant was hit by the earthquake and tsunami in 2011.

In Hong Kong, the Hang Seng index fell 2 percent in the meantime. Tencent and NetEase lost 6 and 7 percent. The two Chinese game companies, along with other industry peers, were again called to account by the authorities. Beijing already decided at the end of August that teenagers are only allowed to play online for a total of three hours a week. So now the policymakers want the game companies to keep sex and violence out of their games.

The Shanghai stock market fell 0.1 percent. Figures from the Chinese government showed that consumer prices rose by 0.8 percent in August. That was slightly less than the inflation rate of 1 percent in July. Prices charged by manufacturers for their goods rose 9.5 percent, after a 9 percent increase in July. This was mainly due to the sharp rise in costs for raw materials. It was the strongest price increase in thirteen years.

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