Business / Financial Markets | TSE DATA & REPORT

Nikkei inches higher on BOJ policy decision

JIJI

The Nikkei 225 average managed to end higher Tuesday, resisting selling pressure that reemerged in the afternoon.

The key market gauge finished 8.88 points, or 0.04 percent, higher at 22,553.72 after sagging 167.91 points Monday.

Meanwhile, the Topix, which covers all first-section issues on the Tokyo Stock Exchange, fell 14.86 points, or 0.84 percent, to end at 1,753.29. It slumped 7.61 points Monday.

The market opened lower in the wake of overnight drops in U.S. stocks on weaker than expected earnings results, particularly at major technology firms, in April-June.

The market remained sluggish throughout the morning session, also reflecting a wait-and-see mood ahead of the Bank of Japan’s announcement on the outcome of its two-day Policy Board meeting.

Early in the afternoon, however, the Nikkei popped into positive territory on buybacks triggered by news reports that the central bank adopted at the meeting a flexible stance in guiding Japan’s key 10-year interest rate. In addition, the BOJ decided to increase its purchases of exchange-traded funds linked to the Topix.

A drop in the yen against the dollar following the BOJ announcement also attracted repurchases of Tokyo stocks, brokers said.

“There were no major changes in the BOJ policies,” Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., said, suggesting that the market rise came as investors’ worries about a drastic change in the monetary policy eased.

But the market quickly lost steam, with buying sentiment waning amid the absence of other major incentives and regrowth of caution prior to BOJ Gov. Haruhiko Kuroda holding a news conference.

The BOJ decisions had only “neutral effects” on the day’s trading, an official of a bank-affiliated brokerage firm said.

Falling issues outnumbered rising ones 1,436 to 613 in the first section, while 54 issues were unchanged.

Volume increased to 1.972 billion shares, from 1.450 billion Monday.

Capcom jumped 6.63 percent after the game maker’s April-June earnings beat a market consensus the previous day.

Fancl gained 5.41 percent, also on its strong earnings outlook.

Among other winners were technology firm TDK and shipping company Mitsui O.S.K. Lines.

On the other hand, banks met with selling after the BOJ decision.

Nihon M&A Center plunged 11.43 percent due to its dismal earnings for April-June.

Also on the minus side were cosmetics maker Pola Orbis and drugstore chain Matsumoto Kiyoshi.