Japan’s Nikkei Ends Higher, Central Bank Meetings in Focus (UPDATE 1)

Reuters

12:43 JST, July 30, 2024 (updated at 16:00 JST)

TOKYO (Reuters) – Japan’s Nikkei share average reversed course to end higher on Tuesday, as investors bought back stocks on dips, but gains were limited ahead of key central bank meetings in Japan and the United States.

The Nikkei inched up 0.15% to close at 38,525.95, after falling as much as 1% earlier in the session.

The index rose 2% on Monday, rebounding from a three-month low hit last week.

The broader Topix ended 0.19% lower at 2,754.45.

“The Nikkei should not have fallen that much on a day like today when the market was just waiting for the central bank decisions,” said Naoki Fujiwara, senior general manager at Shinkin Asset Management.

The Bank of Japan is expected to announce quantitative tightening plans after the policy meeting on Wednesday while the market is divided about a rate hike.

Markets are pricing almost no chance of a U.S. rate cut this week but have fully priced a 25 basis-point reduction in September.

“The market sentiment will be lifted if the BOJ does not raise its policy rate tomorrow, and the yen will weaken, which is also good for stocks,” said Fujiwara.

Chip-making equipment manufacturer Tokyo Electron changed course to rise 0.84%, giving the biggest boost to the Nikkei. Staffing agency Recruit Holdings rose 2.86%.

Fanuc rose 2.93% after the robot maker raised its annual operating profit forecast by 0.8%.

Pasona Group surged 12.17% after a regulatory filing showed activist investor Oasis Management owns a 5.02% stake in the staffing and outsourcing company.

Uniqlo-brand owner Fast Retailing fell 0.53% to weigh on the Nikkei the most.

Of the 225 components of the Nikkei, 100 stocks rose and 123 fell, with two trading flat.