Tokyo: Nikkei hits 1-month low on caution ahead of Fed rate decision

JAPAN’S Nikkei index ended at a more than 1-month low on Wednesday (Jun 15), extending losses for a fourth straight session, as investors awaited a US Federal Reserve policy decision later in the day that could see a much more hawkish shift.

The Nikkei share average dropped 1.14 per cent to close at 26,326.16, near the day’s low. This is the benchmark’s longest losing streak in more than 3 months.

Of the Nikkei’s 225 components, 166 fell and 55 rose, while 4 were unchanged. Energy was the worst-performing sector, tumbling 3.72 per cent following a fall in crude oil prices. Only financials rose 0.3 per cent amid higher global bond yields, and real estate gained 0.37 per cent.

The broader Topix slid 1.2 per cent, also deepening losses in afternoon trading.

Money markets are now certain that the Fed will raise rates by 75 basis points later in the day, which would be the biggest increase since 1984, after data last week showed US consumer price inflation running red hot.

“The market is nervous, and you can feel how hard it is to move in this environment,” said a market participant at a domestic securities company.

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Chip-making equipment manufacturer Tokyo Electron was the Nikkei’s biggest drag, shaving off 25 points with its 1.37 per cent drop. Its peer Advantest sank 1.15 per cent, despite gains for chip-related shares on Wall Street overnight.

Department store operator Isetan Mitsukoshi was the biggest percentage decliner, down 5.20 per cent. Rival Takashimaya sank 4.34 per cent.

Energy company Idemitsu Kosan retreated 3.92 per cent. REUTERS