TOKYO: Japan’s Topix index slipped on Wednesday from a 33-year peak scaled last week, with investor mood turning cautious ahead of a raft of key central bank policy decisions including the Bank of Japan and the US Federal Reserve.
Resource stocks led declines after crude oil prices eased from 10-month peaks, while shippers and other stocks with higher dividends continued to outperform.
The Topix slid 0.37% to 2,421.23, as of 0151 GMT, declining from Friday’s top at 2,438.02, a level last seen in early 1990.
The Nikkei lost 0.12% to 3,3202.55 on Wednesday.
It touched 33,634.31 on Friday for the first time since July 3.
Traders are all but certain the Fed will keep rates on hold as the meeting concludes later in the day, putting the focus on the US central bank’s forward guidance.
Futures markets currently price 40% odds of a further quarter-point hike this year, according to CME FedWatch tool.
The Bank of Japan will announce its policy decision on Friday after the conclusion of a two-day policy meeting.
While the Nikkei is likely to trade in a fairly narrow range ahead of the Fed decision, investors will be keeping a careful eye on the US yields, according to Nomura Securities strategist Kazuo Kamitani.
A rise in yields could weigh on the Nikkei, although the 33,000 line should hold, he said.
In the meantime, investors will continue to favour stocks with high dividends, which are due to be paid at the end of this month, Kamitani added.
Shipping was the best performer among the Tokyo Stock Exchange’s 33 industry groups, climbing 0.55%. Refiners dropped 2.63% and miners tumbled 3.08%.
“A peak in crude oil prices is probably close,” Kamitani said.
Among individual shares, standout decliners included materials maker Teijin and drugmaker Sumitomo Pharma, each losing about 3.4% to make to the bottom of the Nikkei leaderboard.
Of the Nikkei’s 225 components, 133 fell versus 90 that rose, with two trading flat.
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