TOKYO: Japan’s Nikkei share average slid on Tuesday ahead of a pivotal Bank of Japan policy decision, with investors braced for an end to eight years of radical monetary stimulus.
Many semiconductor-related shares had outsized losses, after Nvidia’s annual developer conference failed to provide fresh momentum for the global artificial intelligence-centred chip stock rally.
Energy shares were the top performers, after a 2% jump in crude oil prices overnight.
The Nikkei slipped 0.8% to 39,429,73, as of 0130 GMT, giving up some of Monday’s 2.7% surge, when investors cheered media reports offering further insight on what BOJ policymakers would do on Tuesday.
The broader Topix eased 0.2%, with a sub-index of growth shares down 0.5%, while value stocks were flat.
“With every media outlet basically reporting an end to negative rates, yield curve control and ETF buying - what you could call the full set of three - the market has already completely priced in this outcome,” said Kazuo Kamitani, an equities strategist at Nomura Securities.
He said the updated dot plot when the US Federal Reserve’s own policy meeting ends on Wednesday would be a near-term “focal point.”
Tokyo stocks close sharply higher
Japanese markets are closed for a national holiday that day.
There is no set time for the BOJ’s policy announcement, but it has recently come around the time stock markets reopen from the midday recess at 0330 GMT.
Top BOJ officials, including Governor Kazuo Ueda, have stressed that bond purchases would continue even if yield curve control is ended, and that the central bank will not engage in successive hikes after exiting negative rates.
Chip-testing equipment maker Advantest, which counts Nvidia among its customers, was among the Nikkei’s worst performers on Tuesday, slumping 2.5%.
AI-focused startup investor SoftBank Group dropped 0.7%.
The biggest drag on the Nikkei was Uniqlo store operator Fast Retailing due to its particularly heavy weighting in the index.
Shares of Fast Retailing slid 1.8%.
Inpex was the Nikkei’s top performing energy stock, gaining 2.3%.
Among top sectors, miners - which includes oil explorers - gained 2.2%, while oil and coal producers rose 1.2%.
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