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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%.
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.
