Tokyo: Nikkei posts biggest weekly loss in 2 years after BOJ decision
JAPAN’S Nikkei index on Friday (Jun 17) posted its biggest weekly drop in more than 2 years, tracking Wall Street’s plunge, even as the Bank of Japan maintained its massive stimulus and provided no negative surprises.
The Nikkei share average ended 1.77 per cent lower at 25,963.00, its lowest close since May 12, after falling as much as 2.7 per cent earlier in the session.
The index, which lost 5 sessions in 6, pared some losses after the central bank’s announcement, but still posted a weekly drop of 6.6 per cent, the sharpest loss since the week ended Apr 3, 2020.
The broader Topix lost 1.71 per cent to 1,835,90, shedding 5.5 per cent in the week.
“The Nikkei eased declines after the Bank of Japan kept its monetary policy unchanged, which meant that the yen’s weakness would continue and that is positive to Japanese companies,” said Shogo Maekawa, global market strategist at JP Morgan Asset Management.
The Bank of Japan maintained ultra-low interest rates on Friday and its guidance to keep borrowing costs at “present or lower” levels, signalling its resolve to focus on supporting the economy’s recovery from the Covid-19 pandemic.
US stocks closed sharply lower overnight in a broad sell-off, as recession fears grew following moves by central banks around the globe to stamp out rising inflation after the US Federal Reserve’s largest rate hike since 1994.
“Going forward, the market’s focus will be shifted to economic indicators from central banks’ policy tightening. Investors will be sensitive to any negative signs for the economy,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.
In Japan, technology heavyweights led losses on the Nikkei, with chip-making equipment maker Tokyo Electron shedding 5.04 per cent and chip-testing equipment maker Advantest losing 4.09 per cent. Technology investor SoftBank Group fell 4.24 per cent.
Car and parts makers lost 3.23 per cent as the yen regained its strength against the dollar.
Toyota Motor and Honda Motor fell 3.6 per cent and 2.69 per cent, respectively. Parts maker Denso slipped 4.71 per cent. REUTERS
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