Japan’s Nikkei ends lower on caution ahead of key rate decisions

TOKYO – Japan’s Nikkei share average ended lower on Tuesday, with heavyweight technology stocks leading the losses, as risk appetite was sapped by caution ahead of interest rate decisions from key global central banks, including Japan’s.

The Nikkei index slipped 0.06% to end at 32,682.51, having pulled back from a drop of 0.6% earlier in the session. The broader Topix ended up 0.18% to 2,285.38.

“We should not take this level of decline seriously but market players were not actively making bets ahead of the central banks’ decision in Japan, the US and Europe,” said Takehiko Masuzawa, trading head at Phillip Securities Japan.

“The market consensus is that the Bank of Japan (BOJ) will keep its monetary policy unchanged but the outcome may be the opposite. It is hard to make a move also during the earnings season.”

The BOJ, whose two-day policy meeting starts on Thursday, is widely expected to keep its ultra-low rate policy intact.

But investors remember a surprising tweak in the yield curve control policy in December when the BOJ widened the trading band of the benchmark 10-year bond yield.

The US Federal Reserve is expected to raise interest rates by 25 basis points at its policy meeting on Wednesday.

Among stocks, chip-making equipment maker Tokyo Electron fell 0.51%. Technology investor SoftBank Group lost 0.88%.

Electric motor maker Nidec slipped 3.25% to become the worst performer on the Nikkei.

Uniqlo brand owner Fast Retailing fell 1.27%.

Seven & i rose 0.48% after local media reported that the convenience store operator has reached an agreement to sell its department store operations to US investment fund Fortress Investment Group as early as September, ending stalled negotiations with local people where the flagship outlet is located.

(Reporting by Junko Fujita; Editing by Varun H K and Savio D’Souza)