Japan’s Nikkei Falls for 3rd Straight Session as BOJ Policy Shift Bets Weigh (Update 1)

Reuters

13:03 JST, March 13, 2024 (updated at 16:00 JST)

TOKYO (Reuters) – Japan’s Nikkei share average fell for a third straight session on Wednesday as investors assessed the likelihood of a policy shift at next week’s Bank of Japan (BOJ) meeting.

The Nikkei fell 0.26% to close at 38,695.97, retreating after briefly surpassing the psychologically significant 39,000 level.

The broader Topix ended 0.33% lower at 2,648.51.

Market players were trading with caution ahead of the BOJ’s policy meeting, with many expecting Japan’s central bank to lift short-term interest rates from negative territory either next week or by April.

Chip-related shares tracked overnight Wall Street gains to cap the losses, with Tokyo Electron and Advantest rising 2.41% and 0.36%, respectively.

However, 137 of the index’s 225 constituents declined, with losses in major shares such as SoftBank Group, down 0.19%, and Uniqlo-brand clothing shop operator Fast Retailing losing 0.69%.

Electrical equipment manufacturer Daikin Industries fell 2.64%.

The yen strengthened in the Asian morning, weighing on exporters that benefit from a weaker currency, as traders awaited the initial results of the closely watched spring wage negotiations, due out on Friday.

Toyota Motors was down 0.89%.

“If a higher rate of wage increases than last year is confirmed, views that the BOJ will exit from negative interest rates at the March meeting will strengthen,” said Maki Sawada, a strategist at the investment content department of Nomura Securities.

In that case, “the appreciation of the yen against other currencies will likely weigh on stock prices,” she added.