FX.co ★ Japanese Shares Slip on Hawkish BOJ Signals

The Nikkei 225 Index declined by 0.3% to drop below 50,500, while the more comprehensive Topix Index eased by 0.1% to 3,380 on Wednesday, concluding a two-day period of gains. This downturn was influenced by hawkish comments from the Bank of Japan, which adversely affected domestic stocks. Governor Kazuo Ueda of the BOJ conveyed that the institution is nearing its inflation target, hinting at a potential interest rate hike in the near future. Markets are currently anticipating a possible rate increase as soon as next week, with close attention being paid to Ueda’s remarks following the meeting, which are expected to provide insights into next year's policy direction. Concurrently, the weakening of the yen offered some relief by enhancing the profit outlook for export-driven sectors and making Japanese assets more appealing to international investors. Nevertheless, significant declines were observed among major stocks in the index, such as SoftBank Group (-1%), Disco Corp (-2%), Lasertec (-3.2%), Advantest (-1.9%), and Mitsubishi Heavy (-1.3%).