Tokyo stocks close higher ahead of Fed meet

TOKYO (AFP): Tokyo stocks closed higher on Monday, helped partly by a cheaper yen, with investors’ focus shifting to the US Federal Reserve’s policy decision later this week.

The benchmark Nikkei 225 index rose 0.92 percent, or 266.74 points, to 29,123.18, while the broader Topix index ended up 1.00 percent, or 20.58 points, at 2,078.06.
“Investors are more open to risk-taking after the Bank of Japan policy decision (on Friday), which was seen as more dovish than expected, and after rallies in European and US markets,” IwaiCosmo Securities said.

After an early buying spree of a broad range of shares, “profit-taking emerged, but the yen’s depreciation supported the market,” the brokerage added.

The dollar fetched 136.91 yen, against 136.28 yen in New York, where the yen dropped from early Friday levels after the Bank of Japan stuck to its monetary easing policies.

Investors’ attention is shifting to the Federal Reserve decision on May 3, when “most analysts expect the Fed to again lift interest rates by a quarter-point… in response to inflation,” said National Australia Bank strategist Rodrigo Catril.

But Rakuten Securities chief strategist Masayuki Kubota said the Fed could “either hike rates by 0.25 percentage points, or stop rate hikes”. “Either of the choices could come as a surprise for financial markets” as the Fed’s communication ahead of the meeting had not been enough to give clear clues, he said.

Most markets across Asia and Europe are closed on Monday for public holidays, but Wall Street trading will take place as usual.

Sydney closed up 0.3 percent while Wellington ended down 0.1 percent.
The euro edged down against the dollar to $1.1003, while the pound bought $1.2550, compared to $1.2567 in New York. The euro was flat against the pound at 87.64 pence.

In Tokyo, SoftBank Group rallied 1.35 percent to 5,163 yen after it said its UK-based chip designer Arm has submitted “a draft registration statement” to the US Securities and Exchange Commission related to its planned initial public offering. Astellas Pharma edged up 2.20 percent to 2,093 yen after it said it would acquire US-based Iveric Bio for $5.9 billion.

Sony Group lost 1.83 percent to 12,595 yen after the company on Friday reported record annual sales for the year to March but predicted a lower net profit for 2023-24.

ANA Holdings gained 1.44 percent to 3,000 yen and its rival Japan Airlines rallied 2.36 percent to 2,647 yen.

Electronic parts maker TDK jumped 3.88 percent to 4,825 yen, after forecasting profit growth in the current financial year.