Japan’s Nikkei Ends Higher, Caution before Fed Decision Limits Gains (Update 1)

Reuters

12:32 JST, January 30, 2024 (updated at 16:25 JST)

TOKYO (Reuters) – Japan’s Nikkei share average ended higher on Tuesday, as chip-related shares tracked overnight gains on Wall Street, but caution ahead of the Federal Reserve’s decision limited the rise.

The Nikkei edged up 0.11% to close at 36,065.86, coming off earlier highs, as investors hesitated from active buying toward the end of the session.

“Investors wanted to see comments from the Federal Reserve Chair Jerome Powell. Also they wanted to wait for corporate outlook as the earnings season just started,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.

The Federal Open Market Committee’s (FOMC) rate decision and statement will be announced on Wednesday.

Chip-related shares rose, with Advantest up 1.69% and Shin-Etsu Chemical gaining 3%.

Chipmaker Renesas Electronics climbed 2.81%.

Air-conditioning maker Daikin Industries rose 0.86%.

All three major U.S. stock indexes closed higher overnight, with the tech-heavy Nasdaq enjoying the largest percentage gain and the S&P 500 notching a record closing high.

“Foreign investors continued to lead buying in Japanese stocks as seen in the gains of the Topix Core 30,” said Takehiko Masuzawa, trading head of Phillip Securities Japan.

The Topix Core 30 rose 0.09%, with Nintendo rising 2.22% and Sony Group up 0.87%.

The broader Topix gave up early gains to end 0.1% lower at 2,526.93, with a 0.8% decline in Toyota Motor weighing the most.

Honda Motor slipped 1.03% and Isuzu Motors lost 3.32%.

Tsuruha Holdings fell nearly 9% after retail giant Aeon Cosaid it had entered into exclusive talks with Oasis Management to acquire the shares the Hong Kong-based activist investor holds in the drugstore chain. Aeon fell 0.46%.

Of more than 1,600 stocks on the Tokyo Stock Exchange’s prime market, two-thirds fell while most others rose.