Stocks turned lower on the Tokyo Stock Exchange on Monday, as investors refrained from active trading ahead of a closely watched monetary policy decision by the Bank of Japan at a two-day meeting through Tuesday.
The 225-issue Nikkei average lost 167.91 points, or 0.74 percent, to end at 22,544.84. Friday, the key market gauge advanced 125.88 points.
The Topix index of all first-section issues slumped 7.61 points, or 0.43 percent, to 1,768.15, after adding 9.98 points the previous trading day.
Investor sentiment was battered by an overnight decline on Wall Street following releases of disappointing earnings by some major U.S. companies, including Intel Corp., brokers said.
In addition, largely weak Chinese stocks and lower U.S. index futures in off-hours trading dented investors’ risk appetite, brokers said.
The BOJ is reportedly considering tolerating rises in long-term interest rates from its target and reviewing its fund allocations for exchange-traded funds to cut purchases of ETFs linked to the Nikkei.
As for the BOJ’s target of guiding 10-year Japanese government bond yields to around zero percent as part of its ultraeasy monetary policy, “personally, I think no changes will be made this time,” said Tomoaki Fujii, head of Akatsuki Securities Inc.
Active buying was held in check before the BOJ’s policy announcements Tuesday and a series of corporate earnings releases from major companies in Japan, Fujii also said.
Worse-than-expected earnings at some major companies weighed on the Tokyo market, a securities firm official said.
Falling issues outnumbered rising ones 1,124 to 908 in the TSE’s first section, while 70 issues were unchanged.
Volume increased to 1.450 billion shares from 1.381 billion shares Friday.
S.T. Corp. plunged 15.60 percent, with investors disappointed in the household goods maker’s consolidated earnings for April-June, released Monday, brokers said.
Profit-taking hit manufacturer Komatsu, which announced Friday strong group earnings for April-June. The construction machinery maker lost 2.73 percent.
Other major losers include Mitsubishi Research Institute Inc. and Mitsubishi Electric Corp.
By contrast, banks were buoyant thanks to market expectations that the BOJ may make its long-term JGB yield target flexible. Gainers included mega-bank groups Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc.
Ricoh Co. jumped 8.78 percent after investors were pleased with the office equipment manufacturer’s consolidated earnings for April-June, released Friday, brokers said.
Also on the plus side were electric parts supplier Alps Electric Co. and internet portal site operator Yahoo Japan Corp.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average dropped 160 points to end at 22,520.