Japan's Nikkei rises as investors weigh Iran conflict outlook, Fed decision

TOKYO: Japan’s Nikkei share average rose on Wednesday as investors weighed prospects for an end to the Middle East conflict and awaited the US Federal Reserve’s policy decision.

The Nikkei recouped early losses to climb 0.6% to 69,823.80, while the broader Topix rose 0.8% to 4,024.25.

“With tonight’s Fed meeting approaching, it seems investors are adopting a somewhat more wait-and-see stance,” said Wataru Akiyama, an equities strategist at Nomura Securities.

“However, the fact that crude oil prices have fallen as the situation in the Middle East has stabilised, this serves as a positive factor for share prices.”

Details of a US-Iran interim deal to end the Middle East conflict are emerging, with US President Donald Trump saying it would rule out a nuclear weapon for Tehran and a US official saying it would allow Iran to sell oil once signed.

Oil prices slid about 5% in the previous session to three-month lows, before recovering some ground on Wednesday.

Market breadth remained strong, with 155 stocks advancing against 68 decliners in the Nikkei.

AI-related shares that have underpinned the Nikkei’s gains performed strongly overall, with chip inspection equipment maker Lasertec jumping 13.7% and electronic components maker Murata Manufacturing rising 4.6%.

The biggest percentage losers were tech investor SoftBank Group Corp, down 3%, followed by shipping firm Nippon Yusen, which fell 2.5%.

The Nikkei briefly crossed the 70,000 mark for the first time on Tuesday after the Bank of Japan raised interest rates to 1.00%, as widely expected.

Investors will closely watch new Fed Chairman Kevin Warsh’s comments on inflation, unemployment and the economic outlook at his first post-Federal Open Market Committee press conference later in the day.

The Fed is widely expected to keep interest rates steady.

A raft of economic indicators released earlier in the day were solid.

Japan’s exports rose in May for a ninth consecutive month while core machinery orders for April jumped 8.7% month-on-month, well above economists’ median prediction of 0.9%.