Japan's Nikkei struggles for direction as investors await US CPI data

TOKYO: Japan’s Nikkei share average was trading sideways on Wednesday ahead of key US inflation data, while markets remained jittery over fading prospects for an immediate breakthrough in the Middle East conflict.

The Nikkei was last up 0.06% at 67,011.66 as of 0202 GMT, after swinging between a gain of 0.26% and a loss of 0.35%.

The broader Topix rose 0.43% to 4,118.18. All eyes are on the US Consumer Price Index, due on Wednesday, for clues to the direction of Federal Reserve interest rates.

“Investors appear reluctant to buy aggressively ahead of US CPI data due later in the day, as markets are still trying to assess whether the Federal Reserve could bring forward its rate hikes,” said Wataru Akiyama, an equities strategist at Nomura Securities.

AI-related shares that weigh heavily on Japan’s benchmark Nikkei index were mixed.

Lasertec, a semiconductor inspection equipment maker, lost 2.9% whereas chemical and advanced materials company Resonac surged 6.73%.

The US and Yemen’s Iran-aligned Houthis reported separate attacks on shipping on Tuesday, while Iran’s top security official said the vital Strait of Hormuz shipping route will remain closed unless the United States accepts Iran’s conditions to end the war.

Japan’s mining sub-index rose 2.75%, the biggest gain among the Tokyo Stock Exchange’s 33 industry sub-indexes, tracking a slight rise in oil prices as Brent futures and US West Texas Intermediate crude traded around $80 a barrel.

Overall market breadth was positive, with 122 advancers on the Nikkei index against 100 decliners and three unchanged.

The largest percentage gainers in the index were M3 up 9.88%, followed by the Yokohama Rubber Company gaining 8.39%.

The largest losers by percentage in the index were Rakuten Group, down 11.62%, followed by Sumitomo Metal Mining , shedding 4.29%.