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Japanese shares hover near session high on hints of Fed rate pause

Tan KW
Publish date: Thu, 23 Mar 2023, 05:37 PM
Tan KW
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SINGAPORE Japan's Nikkei share average closed lower on Thursday (March 23), although it hovered near the session high, amid a recovery in broader Asian markets, as investors assessed the US Federal Reserve's (Fed) hints of a pivot on its policy tightening.

The Nikkei index ended 0.17% lower at 27,419.61, but hovered close to the day's high of 27,461.97. The broader Topix closed 0.29% weaker at 1,957.32, but held ground near the session's high of 1,960.14.

Japanese shares tracked an overnight slump in Wall Street, mainly dampened by remarks from US Treasury Secretary Janet Yellen who told lawmakers that she had not considered or discussed "blanket insurance" for US banking deposits without approval by Congress.

Market sentiment was further weighed down by Fed chair Jerome Powell's comment that the US central bank would do "enough" to tame inflation.

"This month's flare-up in financial stability is set to tighten lending conditions and hurt growth," said Mansoor Mohi-uddin, the chief economist of the Bank of Singapore. "We continue to see a US recession this year."

"Investors should remain cautious on risk assets, expect a weaker US dollar as Fed rate hikes peak, and keep favouring high-quality bonds as safe-haven hedges against recession risks," he added.

Investor focus is also on the Bank of England, which is widely expected to raise rates again after a surprise jump in inflation.

In Japan, the yen strengthened 0.60% to 130.64 per dollar on Thursday.

Financials Chiba Bank Ltd, down 1.75%, and Mitsubishi UFJ Financial Group Inc, which traded 1.36% lower, were among the laggards in the Nikkei.

Recruitment firm Recruit Holdings Co Ltd closed 4.78% higher, while vehicle maker Suzuki Motor Corp ended 2.12% better.

Suzuki's upbeat performance came in after Citi raised its stock target price to ¥6,400 per share from ¥5,500, and retained its "buy" rating.

Gainers, however, beat losers by 115 to 100, while 10 remained unchanged.

On the Topix, hotels operator Agora Hospitality Group Co Ltd and artificial intelligence company HEROZ Inc were among the top losers.

Technology firm MegaChips Corp, up 13.85%, and semiconductor company Axell Corp, being 14.97% higher, were the biggest gainers.

Gainers in the Topix outpaced losers by 1,256 to 781, with 122 trading flat.


  - Reuters


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