Tokyo: Nikkei ends lower ahead of Fed chair's speech

[TOKYO] Japan's Nikkei stock average erased early gains to end lower on Wednesday, as investors turned cautious ahead of US Federal Reserve Chair Jerome Powell's remarks later this week, offsetting a rebound in Toyota Motor and other related stocks.

The Nikkei share average edged down 0.03 per cent to close at 27,724.80, while the broader Topix inched up 0.08 per cent to 1,935.66.

The Nikkei rose as much as 0.6 per cent earlier in the session, following an overnight solid finish of all three major US stock indexes, with the S&P 500 and the Nasdaq closing at all-time highs.

"There were no particular reasons to boost stocks today except gains on Wall Street, and investors have become cautious about rallies in the US markets," said Hideyuki Suzuki, general manager at investment research for SBI Securities.

"Toward the end of the week, investors will remain cautious as they await comments at the Jackson Hole meeting."

On Friday, the Federal Reserve will have its annual economic symposium, traditionally held at Jackson Hole, though this year it will take place virtually due to the pandemic.

The focus remains squarely on Mr Powell's remarks for any clues regarding the timeline for Fed's tapering of asset purchases.

Technology shares dragged the Nikkei, with medical services platform M3 losing 1.43 per cent, while chip-related stocks Tokyo Electron and Advantest falling 0.49 per cent and 0.77 per cent, respectively.

Sentiment was also weighed down by concerns about the worsening wave of new Covid-19 infections. Japan is set to expand a state of emergency to eight more prefectures, taking the total to 21, as a surge in cases overwhelms its hospitals.

Toyota Motor, which has shed 3.27 per cent this month, rose 2.29 per cent. Its shares fell recently after it announced a global production cut.

Nissan Motor rose 1.52 per cent, while Toyota's autoparts maker Denso advanced 2.25 per cent.

Steel makers also climbed, with JFE Holdings jumping 5.07 per cent and Nippon Steel rising 2.79 per cent.

REUTERS