TOKYO: Japan’s broad Topix gauge of shares touched a record high before losing momentum on Wednesday, as investors awaited key central bank decisions at home and abroad.
The Topix reached an unprecedented 3,408.99 in early trading before losing steam and closing just 0.1 percent higher at 3,389.02. The blue-chip Nikkei 225 Index slid 0.1 percent to finish at 50,602.80.
US shares were broadly lower overnight on expectations that the Federal Reserve would take a hawkish tone even if it cuts interest rates later on Wednesday.
The Fed is widely expected to make a quarter-percentage-point cut despite inflation still running above the central bank’s 2 percent target.
Meanwhile, the Bank of Japan has been dropping hints that it is preparing to raise its key policy rate next week to tame inflation and declines in the yen.
“The weak yen environment appears to be the main driver of strength for the broad Japanese stock market today,” said Nomura Securities strategist Wataru Akiyama.
“Once the market has largely priced in this slowdown in the Fed’s rate-cut pace, the yen’s depreciation is likely to stabilise,” he said. “Consequently, the rise in the Japanese stock market, including the Nikkei, depends on this continuing yen depreciation.”
The weaker yen acted as a tailwind for automakers, with Honda Motor rising 3.3 percent and Toyota Motor up 1.6 percent.
Comments
Comments are closed for this article.