Tokyo stocks fall back on renewed concerns over U.S. tightening

Jiji Press

19:39 JST, December 15, 2022

TOKYO (Jiji Press) — Tokyo stocks turned lower Thursday, weighed down by rekindled concerns that the U.S. Federal Reserve will continue to aggressively raise interest rates.

The Nikkei Stock Average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section dropped 104.51 points, or 0.37%, to finish at 28,051.70, after climbing 201.36 points Wednesday.

The broader TOPIX index ended 3.52 points, or 0.18%, lower at 1,973.90, following an 11.74-point rise the previous day.

Stocks dived as soon as the market opened, after all three key U.S. market gauges snapped their two-day rallies.

The U.S. central bank carried out a 50-basis-point interest rate hike.

The rate increase, which was smaller than the preceding four hikes, and Federal Reserve Board Chairman Jerome Powell’s remarks at a subsequent press conference “were still hawkish but fell within market expectations,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

But sentiment was dampened by the Fed newly forecasting it could raise its policy rates to 5.1% in 2023 before ending hikes, up from the previous forecast of 4.6%, Kazuo Kamitani, strategist at Nomura Securities Co., noted

Although the market quickly showed resilience, “its topside was capped by concerns over the negative impact of the Fed’s prolonged tightening on the U.S. economy,” Ichikawa noted.

On the Prime section, gainers outnumbered decliners 908 to 825 despite the weaker indexes while 105 issues were flat.

Volume fell to 913 million shares from Wednesday’s 985 million shares.