Japan’s Nikkei index reversed its early gains on Thursday, ending the morning session down 0.12% to 38,831.36. This shift occurred ahead of the Bank of Japan’s (BOJ) policy decision due on Friday.
Earlier in the session, the Nikkei had risen nearly 1%, crossing the 39,000 mark, supported by gains in chip-related stocks.
Picture: Nikkei trading at 38861.15 as seen on the VT Markets app.
Shares of chip-testing equipment maker Advantest rose by 2.39%, benefiting from the U.S. semiconductor index’s 2.9% gain overnight. Advantest provided the most support for the Nikkei.
In contrast, chip-making equipment maker Tokyo Electron gave up early gains, declining by 0.87%, which had the most significant negative impact on the Nikkei.
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Toyota Motor experienced a 1.87% loss, dragging down the Topix index. Additionally, trading firm Mitsubishi Corp slipped by 2.76%, contributing to the overall decline.
The Bank of Japan will conclude its two-day policy meeting on Friday. It is widely expected to keep interest rates steady while considering whether to offer clearer guidance on reducing its massive balance sheet.
The market has already anticipated a reduction in bond buying amounts, so the reaction after the policy meeting is expected to be limited.
The Nikkei newspaper reported that the BOJ will consider trimming its bond buying, marking a big step towards reducing its nearly $5 trillion balance sheet. This move is being closely watched by traders, as it could signal a shift in the BOJ’s monetary policy strategy.
Out of the 225 Nikkei components, 45 stocks rose, 179 fell, and one remained flat. This distribution reflects a market grappling with mixed signals from different sectors, particularly the technology and automotive industries.
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