Ultimate magazine theme for WordPress.

Japanese stocks fall from 33-year highs ahead of Fed policy decision

By Kevin Buckland

TOKYO, Sept 20 (Reuters) – Japan’s Topix index slipped on Wednesday from a 33-year peak hit last week, with investor sentiment rising ahead of a series of key policy decisions by central banks, including the Bank of Japan and the US Federal Reserve, became cautious.

Materials stocks led declines after crude oil prices retreated from 10-month highs, while shipping companies and other higher-dividend stocks continued to outperform.

The Topix slipped 0.37% to 2,421.23 at 0151 GMT, falling from Friday’s peak of 2,438.02, a level last seen in early 1990.

The Nikkei lost 0.12% to 3,3202.55 on Wednesday. On Friday it reached 33,634.31 for the first time since July 3.

Traders are all but certain that the Fed will leave interest rates unchanged as the meeting ends later in the day and the focus will turn to the Federal Reserve’s forward-looking guidance. Futures markets are currently pricing in a 40% chance of another quarter-point increase this year, according to the CME FedWatch tool.

The Bank of Japan will announce its monetary policy decision on Friday after concluding a two-day monetary policy meeting.

While the Nikkei is likely to trade in a fairly tight range ahead of the Fed’s decision, investors will be keeping a careful eye on U.S. yields, according to Kazuo Kamitani, a strategist at Nomura Securities.

A rise in yields could weigh on the Nikkei, although the 33,000 level should hold, he said.

Meanwhile, investors would continue to favor stocks with high dividends that are scheduled to pay out at the end of this month, Kamitani added.

Shipping was the best performer among the 33 industry groups on the Tokyo Stock Exchange, up 0.55%.

Refineries fell 2.63% and mining companies fell 3.08%.

“A peak in crude oil prices is likely near,” Kamitani said.

Among individual stocks, standout losers included materials maker Teijin and drugmaker Sumitomo Pharma, which each lost about 3.4%, ending up at the bottom of the Nikkei rankings.

Of the Nikkei’s 225 components, 133 fell while 90 rose, with two remaining unchanged.

(Reporting by Kevin Buckland; Editing by Sherry Jacob-Phillips)

Comments are closed.

%d bloggers like this: