Tokyo stocks end lower on caution over US Fed meeting outcome

TOKYO (Kyodo) — Tokyo stocks ended slightly lower Wednesday as investors cautiously awaited the outcome of the U.S. Federal Reserve monetary policy meeting later in the day.

The 225-issue Nikkei Stock Average ended down 131.61 points, or 0.34 percent, from Tuesday at 38,274.05. The broader Topix index finished 13.77 points, or 0.50 percent, lower at 2,729.40.

On the top-tier Prime Market, decliners were led by marine transportation, securities, and oil and coal product issues.

The U.S. dollar was firm in the upper 157 yen range in Tokyo as the currency was bought on expectations that the Fed would keep interest rates elevated for longer than expected after U.S. data released Tuesday pointed to increasing labor costs, dealers said.

At 5 p.m., the dollar fetched 157.88-90 yen compared with 157.76-86 yen in New York and 156.85-87 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $1.0661-0662 and 168.32-36 yen against $1.0661-0671 and 168.18-28 yen in New York and $1.0704-0706 and 167.90-94 yen in Tokyo late Tuesday afternoon.

Japan’s benchmark 10-year government bond yield rose 0.020 percentage point from Tuesday’s close to 0.890 percent, tracking an overnight rise in U.S. Treasury yields.

Stocks were mostly in negative territory throughout the day following an overnight fall on Wall Street, while investors locked in gains in issues that climbed sharply the previous day.

“There were some concerns that Fed Chair (Jerome) Powell may hint at another interest rate hike in the future” during a press conference after the policy meeting, as recent economic data have demonstrated stubborn inflation, said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.

Meanwhile, the Nikkei index trimmed losses in the afternoon to briefly enter positive territory after shares of trading houses were bought as Sojitz Corp. released an upbeat earnings projection for the current business year.

Declines in export-related issues were also eased to some extent by the yen’s weakening against the dollar, analysts said.