Japan’s Nikkei Slips as Techs Track US Peers Lower; BOJ Decision in Focus (UPDATE1)

Reuters

12:40 JST, March 15, 2024 (updated at 16:30 JST)

TOKYO, March 15 (Reuters) – Japan’s Nikkei share average dipped on Friday, as heavyweight technology shares tracked their U.S. peers down, while traders continued to position themselves carefully ahead of the Bank of Japan’s (BOJ) meeting next week.

Although the benchmark index snapped a string of losses in the previous session, the Nikkei was unable to keep up the momentum, closing 0.26% down at 38,707.64. It lost 2.5% this week, its largest weekly drop since early December.

The declines come as tech-related shares, which helped to lift the index above 40,000 points earlier this month, followed U.S. chipmaker Nvidia lower as investors continued to lock in profits. The U.S. index of semiconductors dropped 1.8% overnight.

Japan’s chip-testing equipment maker Advantest, which counts Nvidia among its customers, fell 1.4%, while chip-making equipment giant Tokyo Electron declined 4.9%, pulling the overall index down.

The two index heavyweights were also among some of the worst performers for the week, each losing over 7%.

If tech shares continue to struggle, “it might take some time before the Nikkei reaches 40,000 again,” T&D Asset Management Chief Strategist Hiroshi Namioka said.

Meanwhile, growing speculation that Japan’s central bank could end its negative interest rate policy at its meeting on March 18-19 weighed on the Nikkei index.

Focus was on the preliminary results of spring wage negotiations due later on Friday, which will play a crucial role when the BOJ makes its decision.

Losses in the Nikkei were limited by strength in the energy sector, with energy explorers up 3.5%, while oil and coal production firms gained 2.7%.

Utility firms weren’t far behind with a 2.5% gain, with Tokyo Electric Power Holdings jumping 13%.

Non-tech heavyweights like Uniqlo parent firm Fast Retailing , up 0.3%, and pharmaceutical manufacturer Daiichi Sankyo also gave support.

The broader Topix finished up 0.35% at 2670.80.