Japan’s Nikkei falls as tech shares weaken ahead of Fed’s policy update

TOKYO: Japan’s Nikkei index ended lower on Wednesday, dragged down by technology heavyweights after their U.S. peers slumped overnight on concerns over an increasingly hawkish Federal Reserve and tensions surrounding Ukraine.

The Nikkei share average closed down 0.44% at 27,011.33, after touching a 13-month low earlier in the session. The broader Topix fell 0.25% to 1,891.85.

U.S. stocks whipsawed between steep losses and modest gains before ending well off session lows, with rate-sensitive tech stocks weighing most heavily.

The Fed is due to update its policy plan, likely fleshing out timing on expected rate hikes and shrinking its massive balance sheet.

“Investors are just waiting for the end of the Fed’s meeting and how the market will move after that will totally depend on the outcome,” said Takatoshi Itoshima, a strategist at Pictet Asset Management.

“Looking at the sell-off today, the market is expecting a hawkish move and the point is how hawkish the Fed will be.”

Technology heavyweights fell, with semiconductor and electronics company Tokyo Electron losing 0.81%, robot maker Fanuc falling 3.29% and phone operator KDDI dropping 2.57%.

Toyota Motor fell 0.67%, shedding early gains fuelled by the auto maker’s plans to produce a record 11 million cars in fiscal 2022.

Rival Suzuki Motor jumped 5.77%, and was the top gainer in the Nikkei, after its Indian arm Maruti Suzuki improved its margins for the third quarter by raising prices.

Game maker Nintendo climbed 4.36% after Nomura Securities rated its shares “buy”.

SoftBank Group gained 1.72% following a report, which cited that Nvidia was preparing to abandon its purchase of Arm Ltd from the Japanese technology investor.