The benchmark Nikkei average fell for the first time in seven trading days Wednesday, amid a strong wait-and-see mood ahead of the announcement of the outcome of the U.S. Federal Reserve’s two-day monetary policy meeting later in the day.
The 225-issue Nikkei average shed 6.76 points, or 0.02%, to finish at 29,914.33, after advancing 154.12 points Tuesday.
Meanwhile, the Topix index of all first section issues closed 2.53 points, or 0.13%, higher at 1,984.03, following a 12.77-point rise the previous day.
Stocks opened lower, weighed down by sales to lock in profits, which mounted after the U.S. Dow Jones Industrial Average snapped its seven-day winning streak on Tuesday.
The market then rebounded to the positive side later in the morning, buoyed by buying on dips and thanks to the popularity of clothing store operator Fast Retailing and some semiconductor-related issues.
But drops of other Asian markets and of Dow Jones futures in off-hours trading sent the Nikkei and the Topix back into negative territory again, and both indexes drifted in a narrow range for the rest of Wednesday as market players retreated to the sidelines to wait for the result of the Fed’s Federal Open Market Committee meeting.
Many investors moved to sell stocks to adjust their positions before the Fed’s announcement.
But the market’s downside remained firm thanks to hopes for the U.S. economic recovery, Maki Sawada, strategist at Nomura Securities Co., said.
Noting that the U.S. central bank is expected to leave its monetary policy unchanged, Sawada said that “the market’s main focus is on whether Fed Chairman Jerome Powell will voice his wariness over rising U.S. long-term interest rates” at a news conference to be held after the FOMC meeting.
“The market is paying attention to the Fed’s dot plot chart to see if there will be any changes in Fed members’ interest rate forecasts for 2023,” an official at an asset management firm said.
On the TSE first section, gainers far outnumbered decliners 1,409 to 682, while 104 issues were unchanged. Volume decreased to 1.252 billion shares from Tuesday’s 1.419 billion shares.
Z Holdings fell 1.13% following media reports that personal information of Japanese users of the Line messaging app, run by a unit of the firm, became accessible to engineers of a Shanghai company between summer 2018 and late February this year, after system development work was outsourced to the Chinese business.
Among other major losers were medical equipment-maker Terumo and automaker Honda.
On the other hand, Nippon Paint Holdings rose 3.71% thanks to the company’s announcement Tuesday that it will acquire an equity stake of 75% in Malaysian adhesives maker Vital Technical.
Other winners included game-maker Bandai Namco and information security firm Trend Micro.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average stood unchanged at 29,720.
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