TOKYO (AFP): Tokyo’s Nikkei 225 index closed sharply lower on Tuesday ahead of policy decisions by the Federal Reserve and Bank of Japan later this week, with semiconductor firms among the hardest hit.
The benchmark index lost 0.87 percent, or 290.50 points, to end at 33,242.59, but the broader Topix index edged up 0.08 percent, or 1.92 points, to 2,430.30. Traders returned to work after a three-day weekend, and largely took cues from the weak performance of US tech shares since Friday, Rakuten Securities said.
Semiconductor companies came under particular pressure following a media report that Taiwanese chip-making giant TSMC had asked its suppliers to delay deliveries. “Following the negative report… investors sold major high-tech shares including semiconductor-related issues and drove down the overall index,” IwaiCosmo Securities said. Rising yields also encouraged selling, the brokerage house said. Investors were also “cautious” ahead of policy meetings by at the Fed, Bank of England and Bank of Japan, Daiwa Securities said.
The Fed’s gathering, which ends Wednesday, “is expected to set the tone for global markets”, said Stephen Innes at SPI Asset Management. “While the Fed is likely to keep rates unchanged, it is expected to convey a resolutely hawkish stance through its statement and dot plots, potentially holding out the possibility of one more rate hike later this year,” he added.
The BoJ’s gathering will be closely watched to see if officials comment on its ultra-loose monetary policy, with speculation it is preparing to shift to a tighter stance owing to rising inflation and the weakening yen.
The dollar fetched 147.84 yen in Asian trade, against 147.58 yen in New York on Monday. Among major equities in Tokyo, Sony Group lost 0.97 percent to 12,805 yen and Uniqlo operator Fast Retailing fell 1.19 percent to 34,740 yen. Tokyo Electron, which makes tools to build semiconductors, plunged 5.23 percent to 20,750 yen, while Advantest, which makes tests for semiconductors, fell 4.03 percent to 15,955.
