TOKYO: Japan’s Nikkei share average was set for its third consecutive day of declines on Wednesday, as investors assessed the likelihood of a policy shift at the upcoming Bank of Japan monetary policy meeting.
The Nikkei was down 0.42% at 38,636.12 by the midday break, retreating after briefly surpassing the psychologically significant 39,000 level.
The broader Topix was down 0.39% at 2,646.99.
Market players were trading with caution ahead of the BOJ’s policy meeting, with many expecting Japan’s central bank to lift short-term interest rates from negative territory either next week or by April.
Among index heavyweights, chip-making equipment giant Tokyo Electron advanced 1%, followed by a 0.8% increase in Honda Motor.
However, 140 of the index’s 225 constituents declined, with losses in major shares such as SoftBank Group, down 0.8%, and Uniqlo parent company Fast Retailing, which fell 0.3%, eroding early gains.
Tokyo stocks end lower as yen strengthens
Electrical equipment manufacturer Daikin Industries topped heavyweight declines, losing 2.6%.
The yen strengthened in the Asian morning, weighing on exporters that benefit from a weaker currency, as traders awaited the initial results of the closely watched spring wage negotiations, due out on Friday.
Toyota Motors was down about 1%.
“If a higher rate of wage increases than last year is confirmed, views that the BOJ will exit from negative interest rates at the March meeting will strengthen,” said Maki Sawada, a strategist at the investment content department of Nomura Securities.
In that case, “the appreciation of the yen against other currencies will likely weigh on stock price,” she added.
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