Nikkei surrenders most early gains as BOJ data lifts rate-hike bets

TOKYO: Japan’s Nikkei share average gave up most of its early gains to end little changed on Monday, as the central bank’s Tankan survey drove expectations for interest rate hike bets.

The Nikkei inched up 0.12% to close at 39,631.06, after rising as much as 0.9% earlier, tracking its futures higher in the previous session.

The Nikkei average futures on the Chicago Mercantile Exchange ended 1% higher on Friday.

“The outcome of the BOJ’s tankan suggested that Japanese companies will keep raising prices and inflation will continue,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

“That lifted expectations that the BOJ will raise rates again soon, and promoted inventors to sell stocks to lock in profits.”

The BOJ’s closely watched “tankan” survey showed the headline sentiment index for big manufacturers hit +13 in June, up from +11 in March and slightly exceeding a median market forecast for a reading of +12.

The reading, the highest since March 2022, reflected a rebound in automobile sector output and success by manufacturers to pass on rising raw material costs through price hikes.

The broader Topix closed up 0.52% at 2,824.28, after hitting 2,838.67, its highest since January 1990.