Japan’s Nikkei Stock Average tracks Wall Street losses; BOJ coy on hike timing (UPDATE 1)

Reuters

12:21 JST, November 18, 2024 (updated at 17:30 JST)

TOKYO (Reuters) – Japan’s Nikkei share average fell on Monday, taking cues from losses on Wall Street at the end of last week, after Bank of Japan chief Kazuo Ueda failed to offer strong hints on the timing of additional interest rate hikes.

Japanese technology stocks tracked losses among U.S peers, while shares of local drugmakers declined after a noted vaccine skeptic was appointed to head the U.S. health department.

Ueda reiterated that the central bank is prepared to raise borrowing costs if the economy aligns with its forecasts, while cautioning about external risks, including uncertainty over the U.S. economy and volatile financial markets.

The Nikkei ended the day down 1.09% at 38,220.85.

The broader Topix lost 0.73%.

Japanese stocks got some respite after the yen retreated to the weaker side of 155 per dollar from as strong as 153.84 during the session, but the currency was back at 154.32, as of 0633 GMT.

A strong yen reduces the value of overseas revenue for Japan’s heavyweight exporters, and also makes Japanese stocks more expensive for foreign investors.

On Friday, all three of the main Wall Street indexes declined and the Philadelphia SE Semiconductor Index slumped 3.4%.

The initial euphoria over a Donald Trump election win ushering in easier regulation and bigger fiscal spending shifted last week to worries over the potential for higher inflation under his policies that could slow Federal Reserve rate cuts.

His cabinet picks have also caused some concerns, including the appointment of Robert Kennedy Jr, who has spread misinformation on vaccines, to head the Department of Health and Human Services.

Chugai Pharmaceutical slid 10%, making drugmakers the worst performers among the Tokyo Stock Exchange’s 33 industry groups by a wide margin.

“Whether the Trump trade is over or just on pause is not possible to discern at the moment,” said Kazuo Kamitani, an equities strategist at Nomura Securities.

“My personal feeling is that the market will be turbulent all of this month.”

Among tech names, Tokyo Electron dropped 1.59% and startup investor SoftBank Group fell 2.09%.

Nvidia supplier Advantest was volatile, dropping as much as 3.58% before bouncing as much as 1.38% and eventually ending the day with a 0.39% loss.

Nvidia’s earnings report on Wednesday will be one of the most closely watched market events of the week.