Japan's Retail Sales Growth Accelerated, Toyota's Global Sales Dropped In May

Japan's benchmark indexes dropped in Monday's trading amid renewed clashes between the U.S. and Iran around the Strait of Hormuz. 

The Nikkei 225 decreased more than 1%, and the broader TOPIX decreased 0.4%, and the yen weakened to 161.79 against the U.S. dollar. 

International crude oil prices hovered around $72 a barrel after U.S. and Iran exchanged fire over the weekend, but both sides agreed to cease hostilities ahead of the next round of talks later this week in Doha, Qatar. 

Closer to home, Japan's retail sales rose for the third consecutive month in May, driven by the government's stimulus plan and rising wages. 

Retail sales increase accelerated to an annual pace of 5.3% from the upwardly revised 2.8% in the previous month, according to a report released by the Ministry of Economy, Trade, and Industry. 

Sales of automobiles soared 23.7%, machinery and equipment surged 14.5%, department stores increased 6.9%, and food and beverages inched higher by 2.4%. 

However, non-store sales decreased 4.2%, fuel declined 2.6%, and apparel and personal goods inched lower by 0.7%.

On a monthly basis, retail sales increased 1.9%, slower than the upwardly revised 2.1% in April, which was the fastest increase in four months.

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 1.1%, and the broader TOPIX declined 0.4% to 3,947.12. 

Semiconductor- and AI-linked stocks eased on Monday amid growing worries that the elevated level of investment in artificial intelligence infrastructure is not sustainable. 

Kioxia Holdings decreased 6.1% to ¥86,470.0, SoftBank Group fell 5.1% to ¥5,905.0, Tokyo Electron edged up 1.5% to ¥74,060.0, and Advantest Corp. dropped 1.7% to ¥31,860.0. 

Sumitomo Mitsui Financial decreased 1% to ¥6,327.0, Mitsubishi UFJ Financial dropped 1.5% to ¥3,195.0, and Mizuho Financial declined 1.4% to ¥7,689.0. 

Nippon Yusen decreased 1.5% to ¥5,184.0, Mitsui OSK Lines added 0.5% to ¥5,243.0, and Kawasaki Kisen Kaisha fell 0.6% to ¥2,445.50. 

Toyota Motor Corp declined 0.5% to ¥2,755.50, and the vehicle maker said its global sales in May declined 7.2% from a year ago to 834,279 units. 

Global sales decreased for the fourth consecutive month, largely because of the sluggish demand in China amid the Middle East conflict. 

Toyota's exports to the Middle East plunged 66% to 7,323, declining for the fourth consecutive month because of the supply disruptions following the regional conflict.

China Indexes Edged Higher Overlooking Escalating Tensions In Middle East

China's benchmark indexes turned higher at the start of a new week, and tensions in the Middle East escalated.

The Hang Seng Index increased 2.1%, and the mainland-focused CSI 300 Index edged up 0.6%, overlooking renewed tensions in the Middle East. 

Iran stepped up its missile and drone strikes against Bahrain and Kuwait, retaliating for the fresh U.S. attacks on targets in southern Iran.

The renewed attacks raised new uncertainty over the resumption of commercial shipments in the Strait of Hormuz, despite both countries agreeing to cease hostilities and resume security talks. 

China's industrial profit for the period between January and May surged at an annual pace of 18.8% to 3.1 trillion yuan, accelerating from the 18.2% rise in the period between January and April, according to the National Bureau of Statistics.

Later this week, investors are anticipating the release of business surveys, which will offer further insights into the health of the world's second-largest economy. 

In Friday's trading, European markets closed down around 0.3%, and benchmark indexes in New York edged lower by a fraction amid growing concerns that massive spending for the AI infrastructure may not deliver expected returns. 

China Indexes and Stocks 

The Hang Seng Index increased 2.1% to 23,153.89, and the mainland-focused CSI 300 Index added 0.6% to 4,871.03. 

Industrial and Commercial Bank of China added 0.5%, Agriculture Bank of China increased 1.1%, and China Construction Bank increased 0.6%.

NAURA Technology decreased 0.8%, Semiconductor Manufacturing International added 1.9%, and Knowledge Atlas Technology fell 2.7%.

China Indexes Edged Higher Overlooking Escalating Tensions In Middle East

China's benchmark indexes turned higher at the start of a new week, and tensions in the Middle East escalated.

The Hang Seng Index increased 2.1%, and the mainland-focused CSI 300 Index edged up 0.6%, overlooking renewed tensions in the Middle East. 

Iran stepped up its missile and drone strikes against Bahrain and Kuwait, retaliating for the fresh U.S. attacks on targets in southern Iran.

The renewed attacks raised new uncertainty over the resumption of commercial shipments in the Strait of Hormuz, despite both countries agreeing to cease hostilities and resume security talks. 

Investors are anticipating the release of business surveys later this week, which will offer further insights into the health of the world's second-largest economy. 

In Friday's trading, European markets closed down around 0.3%, and benchmark indexes in New York edged lower by a fraction amid growing concerns that massive spending for the AI infrastructure may not deliver expected returns. 

China Indexes and Stocks 

The Hang Seng Index increased 2.1% to 23,153.89, and the mainland-focused CSI 300 Index added 0.6% to 4,871.03. 

Industrial and Commercial Bank of China added 0.5%, Agriculture Bank of China increased 1.1%, and China Construction Bank increased 0.6%.

NAURA Technology decreased 0.8%, Semiconductor Manufacturing International added 1.9%, and Knowledge Atlas Technology fell 2.7%.

KB Home increased 3.4% to $54.59 after the home builder released its fiscal second quarter results. 

Revenue declined 27% to $1.1 billion from $1.5 billion, net income dropped to $27.4 million from $107.9 million, and diluted earnings per share eased to 43 cents from $1.50 a year ago. 

In the period, the company delivered 2,395 homes, a decrease of 23%, and the average home selling price eased to $461,900 from $488,700 a year ago, respectively.

The company's net new orders in the quarter totaled 3,317, a decrease of 4%; backlog at the end of the quarter fell 5% to 4,526; and backlog value fell 7% to $2.2 billion. 

The cancellation rate as a percentage of gross orders was 12%, compared to 16%.

For the fiscal third quarter, the company estimated total home deliveries to range between 2,600 and 2,800 and housing revenue to range between $1.20 billion and $1.35 billion. 

FedEx decreased 6.7% to $295.25 after the parcel delivery company reported its results for the fiscal fourth quarter ending in May.

Revenue increased to $25.0 billion from $22.2 billion, net income edged lower to $1.60 billion from $1.65 billion, and diluted earnings per share eased to $6.60 from $6.88 a year ago. 

The company completed the spinoff of FedEx Freight on June 1, and the freight company paid a cash dividend of $4.1 billion to FedEx Corporation. 

During fiscal 2026, FedEx returned approximately $2.2 billion to stockholders through the combination of $776 million of stock repurchases and $1.4 billion of dividend payments. 

As of the end of May, $1.3 billion remained available under the company's 2024 stock repurchase authorization. 

FedEx estimated revenue to decline 11% and diluted earnings per share from continuing operations to range between $16.55 and $17.75 for the calendar year 2026.

Micron Technology soared 17.7% to $1,234.52 after the computer memory maker reported solid results in the fiscal third quarter ending in May. 

Revenue soared to $41.5 billion from $9.3 billion, net income advanced to $28.2 billion from $1.9 billion, and diluted earnings per share rose to $24.67 from $1.68 a year ago. 

The company estimated revenue in the fiscal fourth quarter to jump to $50 billion from $11.3 billion a year ago. 

Revenue in the cloud memory unit soared fourfold to $13.7 billion from $3.3 billion; the core data center business unit advanced sevenfold to $11.5 billion from $1.5 billion; the mobile and client business unit jumped nearly fourfold to $11.5 billion from $3.2 billion; and the automotive and embedded business unit increased fourfold to $4.6 billion from $1.1 billion a year ago. 

Gross margin as a percentage of revenue jumped to 84.6% from 74.4% in the previous quarter and 37.7% in the period a year ago. 

Japan Stocks Fall On Tech Losses, Tokyo Inflation Stays Below BoJ's Target Rate

Japan's indexes erased gains from the previous session on Friday, and benchmark indexes closed down for a week amid rising concerns over the sustainability of the elevated level of AI infrastructure spending. 

The Nikkei 225 Stock Average decreased 4.3%, the broader TOPIX declined 1.6%, and the Japanese yen traded at 161.56 against the U.S. dollar. 

For the week, the Nikkei 225 stock average declined 3.6%, and the broader TOPIX fell 2.6%. 

The yen continued to hover near a four-decade low, supporting the case for an intervention from the ministry of finance and the Bank of Japan as policymakers struggle to contain the fall of the currency despite higher interest rates. 

Brent crude oil prices decreased 1.9% to $74.13 a barrel amid improving shipping activity through the Strait of Hormuz and easing supply conditions for the import-dependent Japan. 

Tokyo-Area Core Inflation Accelerated to 3-Month High In June

Tokyo-area's core and overall annual inflation accelerated in June from May amid broadening price pressures since the start of the Middle East conflict. 

Investors closely watch the Tokyo area's inflation, as the measure of price change is deemed a reliable signal for price trends in the broader economy of Japan.

Overall inflation increased to 1.7% from 1.4% in May, and core inflation, which excludes energy prices, advanced to an annual rate of 1.6% from 1.3% in the previous month, according to a report released by the Statistics Bureau of Japan. 

However, core inflation remained below the central bank's 2% target rate for the fifth consecutive month and overall inflation for the sixth consecutive month. 

Favorable base effects and energy subsidies kept in check the impact of higher raw material costs linked to the Middle East conflict. 

The core-core rate of inflation, which excludes food and energy prices, accelerated to 1.9% in June from May, confirming rising inflationary pressures in the broader economy. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 4.5% to 69,093.82, and the broader TOPIX dropped 1.4% to 69,093.82. 

AI- and semiconductor-linked stocks led decliners in Friday's trading in Tokyo, reversing the previous session's sharp gains, driven by a surge in memory-related stocks. 

SoftBank Group dropped 13% to ¥6,186.0, Kioxia Holdings declined 11.6% to ¥91,710.0, and Taiyo Yuden decreased 12.9% to ¥16,375.0, and Furukawa Electric eased 8.5% to ¥45,520.0. 

Japan Stocks Fall On Tech Losses, Tokyo Inflation Stays Below BoJ's Target Rate

Japan's indexes erased gains from the previous session on Friday, and benchmark indexes closed down for a week amid rising concerns over the sustainability of the elevated level of AI infrastructure spending. 

The Nikkei 225 Stock Average decreased 4.3%, the broader TOPIX declined 1.6%, and the Japanese yen traded at 161.56 against the U.S. dollar. 

For the week, the Nikkei 225 stock average declined 3.6%, and the broader TOPIX fell 2.6%. 

The yen continued to hover near a four-decade low, supporting the case for an intervention from the ministry of finance and the Bank of Japan as policymakers struggle to contain the fall of the currency despite higher interest rates. 

Brent crude oil prices decreased 1.9% to $74.13 a barrel amid improving shipping activity through the Strait of Hormuz and easing supply conditions for the import-dependent Japan. 

Tokyo-Area Core Inflation Accelerated to 3-Month High In June

Tokyo-area's core and overall annual inflation accelerated in June from May amid broadening price pressures since the start of the Middle East conflict. 

Investors closely watch the Tokyo area's inflation, as the measure of price change is deemed a reliable signal for price trends in the broader economy of Japan.

Overall inflation increased to 1.7% from 1.4% in May, and core inflation, which excludes energy prices, advanced to an annual rate of 1.6% from 1.3% in the previous month, according to a report released by the Statistics Bureau of Japan. 

However, core inflation remained below the central bank's 2% target rate for the fifth consecutive month and overall inflation for the sixth consecutive month. 

Favorable base effects and energy subsidies kept in check the impact of higher raw material costs linked to the Middle East conflict. 

The core-core rate of inflation, which excludes food and energy prices, accelerated to 1.9% in June from May, confirming rising inflationary pressures in the broader economy. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 4.5% to 69,093.82, and the broader TOPIX dropped 1.4% to 69,093.82. 

AI- and semiconductor-linked stocks led decliners in Friday's trading in Tokyo, reversing the previous session's sharp gains, driven by a surge in memory-related stocks. 

SoftBank Group dropped 13% to ¥6,186.0, Kioxia Holdings declined 11.6% to ¥91,710.0, and Taiyo Yuden decreased 12.9% to ¥16,375.0, and Furukawa Electric eased 8.5% to ¥45,520.0. 

China's Indexes Register Sharp Losses Amid Global AI Rout

China's benchmark indexes faced selling pressure amid an Asia-wide decline, driven by a sharp sell-off in AI- and semiconductor-related stocks. 

The Hang Seng Index decreased 2.6%, and the mainland-focused CSI 300 Index fell 2.8% as investors questioned the level of return on investment in AI infrastructure. 

The market rally in the previous session quickly faded as investors grew wary of the cost of building AI data centers and uncertain returns on investment. 

For the week, the Hang Seng Index dropped nearly 5%, and the CSI 300 Index declined 1.4% amid growing concerns over AI valuation and lagging returns. 

The market sell-off across Asia dragged down the Nikkei 225 stock average by 4.4% and the Kospi by 7.6%, and they declined 3.6% and 8% in the week, respectively. 

Brent crude oil prices decreased 2% to $73.76 a barrel, and about 20 oil tankers passed through the Strait of Hormuz and eased concerns over the supply in global markets.

On the economic front, China's fiscal spending in the five months to May rose 0.8% to 11.4 trillion yuan, or $1.6 trillion, according to the latest data from the finance ministry. 

The central government's steady spending provided economic support for the heavy industries and defense-related expenditures. 

Central government spending increased 6.5% to 1.7 trillion yuan, while local government spending inched lower 0.1% to 9.7 trillion yuan. 

China Indexes and Stocks 

The Hang Seng Index decreased 2.6% to 22,557.37. The mainland-focused CSI 300 Index also dropped 2.8%, reaching 4,878.74. 

The steep decline in AI-related stocks dragged down semiconductor stocks, AI model makers, and infrastructure developers. 

Knowledge Atlas Technology dropped 10% to HK$2,098.0, MiniMax Group fell 8.4%, and SMIC decreased 6.5% to $80.35. 

Lingyi iTech (Guangdong) Co. rose as much as 6% to HK$11.80 before settling at HK$11.45, below its offer price of HK$10.18, and the precision parts maker and Apple supplier completed its Hong Kong listing. 

China's Indexes Register Sharp Losses Amid Global AI Rout

China's benchmark indexes faced selling pressure amid an Asia-wide decline, driven by a sharp sell-off in AI- and semiconductor-related stocks. 

The Hang Seng Index decreased 2.6%, and the mainland-focused CSI 300 Index fell 2.8% as investors questioned the level of return on investment in AI infrastructure. 

The market rally in the previous session quickly faded as investors grew wary of the cost of building AI data centers and uncertain returns on investment. 

For the week, the Hang Seng Index dropped nearly 5%, and the CSI 300 Index declined 1.4% amid growing concerns over AI valuation and lagging returns. 

The market sell-off across Asia dragged down the Nikkei 225 stock average by 4.4% and the Kospi by 7.6%, and they declined 3.6% and 8% in the week, respectively. 

Brent crude oil prices decreased 2% to $73.76 a barrel, and about 20 oil tankers passed through the Strait of Hormuz and eased concerns over the supply in global markets.

On the economic front, China's fiscal spending in the five months to May rose 0.8% to 11.4 trillion yuan, or $1.6 trillion, according to the latest data from the finance ministry. 

The central government's steady spending provided economic support for the heavy industries and defense-related expenditures. 

Central government spending increased 6.5% to 1.7 trillion yuan, while local government spending inched lower 0.1% to 9.7 trillion yuan. 

China Indexes and Stocks 

The Hang Seng Index decreased 2.6% to 22,557.37. The mainland-focused CSI 300 Index also dropped 2.8%, reaching 4,878.74. 

The steep decline in AI-related stocks dragged down semiconductor stocks, AI model makers, and infrastructure developers. 

Knowledge Atlas Technology dropped 10% to HK$2,098.0, MiniMax Group fell 8.4%, and SMIC decreased 6.5% to $80.35. 

Lingyi iTech (Guangdong) Co. rose as much as 6% to HK$11.80 before settling at HK$11.45, below its offer price of HK$10.18, and the precision parts maker and Apple supplier completed its Hong Kong listing. 

Micron's Blockbuster Earnings Lift Nasdaq Composite and S&P 500

Stocks in New York advanced, reversing losses from the previous session amid a renewed demand for memory chip makers. 

The S&P 500 Index increased 0.5%, and the tech-focused Nasdaq Composite advanced 2.2% following a surge in semiconductor stocks. 

Micron Technology reported solid results in the fiscal third quarter and guided a strong sales outlook in the current quarter. 

The fellow chipmakers—SanDisk, Western Digital, Lam Research, and Applied Materials—rose in sympathy after Micron's latest earnings results. 

Market sentiment was also bolstered after crude oil prices eased for the fourth consecutive session and fell below the pre-wartime levels. 

West Texas Intermediate crude oil prices decreased 1.1% to $69.56 a barrel, nearly wiping all gains made since the start of the Middle East conflict. 

Investors held out for a rising flow of crude oil to global markets through the Strait of Hormuz as progress in U.S.-Iran talks improved the supply outlook. 

On the economic front, investors reviewed May's personal consumption expenditures price index, and the alternative measure of inflation held steady. 

The headline index held steady at a monthly 0.4% and accelerated to an annual 4.1% from 3.8% in the previous month, respectively, according to the latest report released by the Bureau of Economic Analysis. 

Core PCE, which excludes volatile food and energy prices, advanced monthly by 0.3% and annually by 3.4%.

U.S. Movers 

Micron Technology soared 17.7% to $1,234.52 after the computer memory maker reported solid results in the fiscal third quarter ending in May. 

Revenue soared to $41.5 billion from $9.3 billion, net income advanced to $28.2 billion from $1.9 billion, and diluted earnings per share rose to $24.67 from $1.68 a year ago. 

The company estimated revenue in the fiscal fourth quarter to jump to $50 billion from $11.3 billion a year ago. 

Revenue in the cloud memory unit soared fourfold to $13.7 billion from $3.3 billion; the core data center business unit advanced sevenfold to $11.5 billion from $1.5 billion; the mobile and client business unit jumped nearly fourfold to $11.5 billion from $3.2 billion; and the automotive and embedded business unit increased fourfold to $4.6 billion from $1.1 billion a year ago. 

Gross margin as a percentage of revenue jumped to 84.6% from 74.4% in the previous quarter and 37.7% in the period a year ago. 

Micron's Blockbuster Earnings Lift Nasdaq Composite and S&P 500

Stocks in New York advanced, reversing losses from the previous session amid a renewed demand for memory chip makers. 

The S&P 500 Index increased 0.5%, and the tech-focused Nasdaq Composite advanced 2.2% following a surge in semiconductor stocks. 

Micron Technology reported solid results in the fiscal third quarter and guided a strong sales outlook in the current quarter. 

The fellow chipmakers—SanDisk, Western Digital, Lam Research, and Applied Materials—rose in sympathy after Micron's latest earnings results. 

Market sentiment was also bolstered after crude oil prices eased for the fourth consecutive session and fell below the pre-wartime levels. 

West Texas Intermediate crude oil prices decreased 1.1% to $69.56 a barrel, nearly wiping all gains made since the start of the Middle East conflict. 

Investors held out for a rising flow of crude oil to global markets through the Strait of Hormuz as progress in U.S.-Iran talks improved the supply outlook. 

On the economic front investors are awaiting the release of May's personal consumption expenditures price index, and the alternative measure of inflation is expected to accelerate. 

The headline index is estimated to rise monthly by 0.5% and accelerate to an annual 4.1% from 3.8% in the previous month, respectively.

Core PCE, which excludes volatile food and energy prices, is estimated to advance monthly by 0.3% and annually by 3.4%.

U.S. Movers 

Micron Technology soared 17.7% to $1,234.52 after the computer memory maker reported solid results in the fiscal third quarter ending in May. 

Revenue soared to $41.5 billion from $9.3 billion, net income advanced to $28.2 billion from $1.9 billion, and diluted earnings per share rose to $24.67 from $1.68 a year ago. 

The company estimated revenue in the fiscal fourth quarter to jump to $50 billion from $11.3 billion a year ago. 

Revenue in the cloud memory unit soared fourfold to $13.7 billion from $3.3 billion; the core data center business unit advanced sevenfold to $11.5 billion from $1.5 billion; the mobile and client business unit jumped nearly fourfold to $11.5 billion from $3.2 billion; and the automotive and embedded business unit increased fourfold to $4.6 billion from $1.1 billion a year ago. 

Gross margin as a percentage of revenue jumped to 84.6% from 74.4% in the previous quarter and 37.7% in the period a year ago. 

Nikkei 225 Surged to Record High Driven By Rebound In AI-Related Stocks and Easing Oil Prices

Stocks in Tokyo advanced, reversing losses in the previous two sessions, tracking gains in overnight trading in New York. 

The Nikkei 225 Stock Average soared more than 4%, the broader TOPIX gained 1.6%, and the Japanese yen traded at 161.80 against the U.S. dollar. 

The U.S.-based Micron Technology reported solid quarterly results and issued a better-than-expected sales outlook, driving semiconductor-related stocks higher in Tokyo. 

Micron Technology's strong results reinforced optimism around the artificial intelligence sector, and Japanese equipment and component makers are well-positioned to benefit from the global expansion of AI infrastructure.

Market sentiment was further bolstered by the steady decline in crude oil prices for the fourth day in a row. 

Brent crude prices decreased 1.5% to $72.44 a barrel, driven by optimism over the apparent progress in U.S.-Iran peace talks. 

Commercial shipments in the Strait of Hormuz increased as more tankers successfully navigated the narrow passageway, delivering crude oil to global markets and alleviating concerns for Japan's import-dependent economy. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average surged 4.4% to 72,238.55, and the broader TOPIX also gained 1.6%, reaching 4,025.47. 

SoftBank Group, Tokyo Electron, Kioxia Holdings, Advantest Corp., Taiyo Yuden, and Murata Manufacturing jumped between 5% and 9%. 

Sumitomo Mitsui Financial Group advanced 0.4% to ¥6,378.0, Mitsubishi UFJ Financial gained 1.3% to ¥3,248.0, and Mizuho Financial inched higher 0.5% to ¥7,758.0.