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Nikkei hits 1-1/2-month high, Fed nerves cap gains


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TOKYO — Japan’s Nikkei share average touched a 1-1/2-month high on Wednesday, buoyed by broad Wall Street gains overnight, although caution before a crucial Federal Reserve policy decision later in the day limited the upside.

Domestic earnings results also produced several big winners and losers in the session.

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The Nikkei entered the mid-day break up 0.18% at 27,376.22. That was well off the early high of 27,547.67, a level last seen on Dec. 16, before the Bank of Japan shocked investors by tweaking its yield curve controls in a de facto tightening of monetary policy.

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The broader Topix was also well back from the morning’s high.

All of the big three U.S. stock benchmarks closed more than 1% higher on Tuesday, after a deceleration in U.S. labor cost rises added to the case for a slowing of aggressive Fed policy tightening.

Money markets have priced in a quarter-point rate hike later Wednesday, down from half a point previously and 75 basis points prior to that.

“For the moment, the market’s focus is on the outlook for monetary policy, and if the U.S. economy will have a soft or hard landing,” Maki Sawada, a strategist at Nomura Securities, said in a briefing with journalists.

“The Nikkei is likely to stay in positive territory throughout the day,” but with the Fed decision looming, “the topside is going to be heavy,” she said.

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Of the Nikkei’s 225 components, 172 rose versus 49 that fell, with four flat.

Energy was the best performing sector following a jump in crude as fears of a U.S. recession retreated.

Only healthcare and utilities had marginal losses.

Elecronics component maker Alps Alpine was the best performer, gaining 5.97%, followed by chip-related stocks Screen Holdings and Advantest, up 4.28% and 3.71% respectively, all after announcing financial results.

Housing material maker TOTO led losers, dropping 6.47%, followed by office equipment manufacturer Seiko Epson’s 4.88% slide, also following earnings announcements. (Reporting by Kevin Buckland; editing by Uttaresh.V)


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