TOKYO: Tokyo shares closed lower on Thursday after the US Federal Reserve sketched out plans for additional interest rate hikes despite recent data showing an easing in inflation.
The benchmark Nikkei 225 index fell 0.37 percent, or 104.51 points, to end at 28,051.70, while the broader Topix index slipped 0.18 percent, or 3.52 points, to 1,973.90.
“The Japanese market appears led by sell-orders on concerns that (the Federal Reserve’s) monetary tightening will weigh on the US economy, which also caused falls in US stocks,” Mizuho Securities said.
Before dawn in Japan, the US central bank moderated its all-out campaign to cool inflation, lifting its benchmark lending rate by half a percentage point – but Fed Chair Jerome Powell said the bank’s policy was “still not restrictive enough”.
“Investors had widely anticipated the Fed would hike key policy rates by half a percentage point,” Stephen Innes of SPI Asset Management said in a note.
“But they are still trying to figure out the endgame and how far interest rates will rise next year.”
The dollar bought 135.61 yen in Asian trade, against 135.45 yen in New York late Wednesday.
Japan recorded a trade deficit of 2.03 trillion yen ($15 billion) in November, the 16th consecutive monthly deficit led by soaring fuel costs, according to data released by the finance ministry before the opening bell.
Japan’s Nikkei falls as tech stocks drag ahead of Fed meet
Sony Group lost 0.94 percent to 11,045 yen while Olympus dropped 1.21 percent to 2,643 yen.
Chugai Pharmaceutical fell 2.05 percent to 3,574 yen while Astellas Pharma slid 0.91 percent to 2,166 yen.
Major defence contractor Mitsubishi Heavy Industries jumped 4.12 percent to 5,676 yen. The government is expected to announce its biggest defence overhaul in decades as soon as Friday.
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