Tokyo stocks close down amid caution ahead of U.S. Fed meeting

Tokyo stocks closed marginally lower Wednesday as investors awaited the U.S. Federal Reserve’s meeting.

Wednesday saw Tokyo stocks closed marginally lower as investors exercised caution ahead of the U.S. Federal Reserve’s monetary policy meeting scheduled for later in the day.

The Nikkei Stock Average, comprising 225 issues, concluded the session down by 131.61 points, or 0.34 percent, from Tuesday, settling at 38,274.05. Similarly, the broader Topix index saw a decline of 13.77 points, or 0.50 percent, ending at 2,729.40.

Among the top-tier Prime Market companies, marine transportation, securities, and oil and coal product issues led the decliners.

Dealers noted that the U.S. dollar remained robust in the upper 157 yen range in Tokyo, driven by expectations that the Federal Reserve would prolong elevated interest rates. This sentiment stemmed from Tuesday’s U.S. data indicating rising labor costs.

Throughout the day, stocks primarily trended negatively, influenced by a previous decline on Wall Street, while investors opted to capitalize on gains from previous sharp climbs.

Masahiro Yamaguchi, head of investment research at SMBC Trust Bank, expressed concerns that Fed Chair Jerome Powell might hint at future interest rate hikes during the press conference following the policy meeting. This anticipation arises from recent economic data illustrating persistent inflation.

In the afternoon, the Nikkei index managed to reduce its losses and briefly turned positive as trading houses’ shares were acquired following an optimistic earnings projection from Sojitz Corp. for the current business year.

Furthermore, the decline in export-related issues was somewhat mitigated by the yen’s depreciation against the dollar.