Japan’s Nikkei ends at six-week low; bank shares gain on BOJ rate-hike expectations


Article content

TOKYO — Japan’s Nikkei share average closed at a six-week low on Monday, tracking a drop in Wall Street in the previous session, while banks’ stocks rose on speculation of a domestic interest rate hike.

The Nikkei index fell 1.05% to close at 27,237.64, its lowest since Nov. 4 in its third straight session of declines. The broader Topix slipped 0.76% to 1,935.41.

Article content

U.S. stocks dropped for a third straight session on Friday and posted a second straight weekly loss as fears continued to mount that the Federal Reserve’s campaign to arrest inflation would tilt the economy into a recession.

Advertisement 2

Article content

The Fed’s decision last week to raise interest rates by 50 basis points (bps) was expected. But Fed Chair Jerome Powell signaled more policy tightening, and the central bank projected rates would top the 5% mark in 2023, a level not seen since 2007.

“I was bullish until the FOMC (Federal Open Market Committee) but my stance has changed after seeing the outcome of the meeting,” said Takatoshi Itoshima, a strategist at Pictet Asset Management Japan.

The banking sector rose 1.19% and was the top gainer among the Tokyo bourse’s 33 industry sub-indexes.

Speculation that the Bank of Japan may tweak its ultra-low rate policy rose after a report that the Japanese government will consider revising next year a joint statement with the BOJ over the latter’s inflation target.

Advertisement 3

Article content

Fukuoka Financial Group gained 2.01% and Resona Holdings rose 1.96%. Shizuoka Financial Group rose 1.88% and was the third biggest supporter for the Nikkei.

“In the absence of positive cues, the news drove the banking sector higher and capped the losses,” said Yugo Tsuboi, senior strategist at Daiwa Securities.

Lawson slipped 3.36% after the convenience store chain withdrew an application to list high-end supermarket chain, Seijo Ishii.

Toshiba tanked 6.86% after a report said its preferred bidder Japan Industrial Partners may lower the valuation of the company. (Reporting by Junko Fujita; Editing by Savio D’Souza and Rashmi Aich)



Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.


Source link

Comments are closed.