As investors anticipate the Fed’s decision, Japan’s Nikkei declines
Nikkei share average: On this first day of the month, investors remained cautious as they anticipated the US Federal Reserve’s monetary policy announcement, causing the Nikkei share average in Japan to fall during the morning session on Wednesday.
At the break in the morning, the Nikkei was down 0.56% to 38,189.54, while the Topix as a whole fell 0.64% to 2725.70.
Amid ongoing worries over US inflation, it is largely expected that the Federal Reserve Open Market Committee (FOMC) will keep interest rates at their present level at the end of its two-day meeting on Wednesday.
US equities ended the night down as investors considered economic data that showed rising labor costs and falling consumer confidence.
Although the markets have reduced their expectations of a rate decrease this year, investors are nonetheless cautious about the tone that Federal Reserve Chair Jerome Powell may take at his news conference.
Questions about the possible negative implications of severe currency depreciation on the domestic economy and the Bank of Japan’s rate outlook have been raised in response to the significant policy rate disparity between the US and Japan, which is still pushing the yen lower.
Investors are also on edge due to worries about currency intervention and suspicions that Tokyo may have already acted.
In that sense, T&D Asset Management chief strategist Hiroshi Namioka said, “I don’t anticipate significant stock purchases while the yen remains weak.”
Out of the 225 components that make up the Nikkei, just 44 saw gains and 181 saw declines.
Company-specific happenings and earnings announcements affected the movements of individual stocks.
After the release of profits that exceeded expectations after market hours on Tuesday, shares of chip-related equipment company Lasertec shot up 16.1%.
On Wednesday, West Japan Railway Co. saw a 7.7% surge after declaring that it would repurchase 4.1% of its own shares.
On the other hand, JGC Holdings Corp. had the biggest decrease, falling 11.2 percent as a result of a lower-than-expected sales estimate.
