Japan’s Nikkei Stock Average Retreats as Tech Shares Drag; BOJ Stands Pat

Reuters

17:55 JST, March 19, 2025

TOKYO, March 19 (Reuters) – Japan’s Nikkei share average sank in the final minute of trading on Wednesday to close lower as technology shares weighed, while the Bank of Japan kept interest rates unchanged as widely expected.

The Nikkei finished the day down 0.25% at 37,751.88.

It had been higher most of the day, including immediately after the BOJ policy decision, but turned flat in the afternoon before a sudden drop at the close.

It was the second day in a row that the Nikkei had topped the psychologically significant 38,000 mark, only to pull back by the end of trading.

By contrast, the broader Topix, which has a lower proportion of tech stocks, ended the day 0.45% higher.

Traders were cautious with the U.S. Federal Reserve scheduled to announce a policy decision later on Wednesday and Japanese markets closed for a public holiday on Thursday, meaning investors can’t react until Friday.

Both chip-testing equipment maker Advantest and chip-making machinery manufacturer Disco dropped about 5%, tracking a sell-off in U.S. semiconductor stocks overnight.

At the other end, trading houses extended this week’s rally after Warren Buffett’s Berkshire Hathaway raised holdings. Wholesale was the best performer among the Tokyo Stock Exchange’s 33 industry groupings, climbing 2.34%.

Transport equipment was another strong sector, rising 1.36% as a weaker yen boosted the value of overseas sales.

The BOJ held short-term interest rates steady at 0.5% in an unusually early decision that came during morning trading.

The central bank reiterated that the economy was “recovering moderately,” but said the outlook “remains highly uncertain” due to risks from global trade policies.

The Fed is also expected to leave policy unchanged, and the focus will be on the impact of U.S. President Donald Trump’s aggressive and erratic tariff campaign on economic projections.

“Concerns about a worsening of the U.S. economy under Trump’s tariffs is deeply rooted,” said Kazuo Kamitani, a strategist at Nomura Securities.

“It will take a toning down on trade policy for the market’s mood to improve. That’s what investors are waiting for.”