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Japan's Nikkei slides before BOJ decision as chip shares weigh
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Japan's Nikkei slides before BOJ decision as chip shares weigh
Mar 18, 2024 7:42 PM

TOKYO, March 19 (Reuters) - Japan's Nikkei share average

slid on Tuesday ahead of a pivotal Bank of Japan policy

decision, with investors braced for an end to eight years of

radical monetary stimulus.

Many semiconductor-related shares had outsized losses, after

Nvidia's ( NVDA ) annual developer conference failed to provide

fresh momentum for the global artificial intelligence-centred

chip stock rally.

Energy shares were the top performers, after a 2% jump in

crude oil prices overnight.

The Nikkei slipped 0.8% to 39,429,73, as of 0130

GMT, giving up some of Monday's 2.7% surge, when investors

cheered media reports offering further insight on what BOJ

policymakers would do on Tuesday.

The broader Topix eased 0.2%, with a sub-index of

growth shares down 0.5%, while value stocks

were flat.

"With every media outlet basically reporting an end to

negative rates, yield curve control and ETF buying - what you

could call the full set of three - the market has already

completely priced in this outcome," said Kazuo Kamitani, an

equities strategist at Nomura Securities.

He said the updated dot plot when the U.S. Federal Reserve's

own policy meeting ends on Wednesday would be a near-term "focal

point." Japanese markets are closed for a national holiday that

day.

There is no set time for the BOJ's policy announcement, but

it has recently come around the time stock markets reopen from

the midday recess at 0330 GMT.

Top BOJ officials, including Governor Kazuo Ueda, have

stressed that bond purchases would continue even if yield curve

control is ended, and that the central bank will not engage in

successive hikes after exiting negative rates.

Chip-testing equipment maker Advantest ( ADTTF ), which

counts Nvidia ( NVDA ) among its customers, was among the Nikkei's worst

performers on Tuesday, slumping 2.5%.

AI-focused startup investor SoftBank Group ( SFTBF ) dropped

0.7%.

The biggest drag on the Nikkei was Uniqlo store operator

Fast Retailing ( FRCOF ) due to its particularly heavy weighting

in the index. Shares of Fast Retailing ( FRCOF ) slid 1.8%.

Inpex ( IPXHF ) was the Nikkei's top performing energy stock,

gaining 2.3%. Among top sectors, miners - which

includes oil explorers - gained 2.2%, while oil and coal

producers rose 1.2%.

(Reporting by Kevin Buckland; Editing by Subhranshu Sahu)

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