FX.co ★ Japanese Shares Slip as BOJ Meeting Eyed

The Nikkei 225 experienced a decline of 0.4%, dropping below the 54,000 mark, while the Topix index fell by 0.2% to reach 3,660. This downturn extends the losses from the previous trading session, as investors keenly await the upcoming Bank of Japan policy meeting. Market participants are eager for any indications concerning the central bank’s approach to interest rate hikes. Although the Bank of Japan is anticipated to maintain its current policy stance next week, market forecasts suggest a potential rate increase around June. Investor sentiment is further dampened by political uncertainty, as Prime Minister Sanae Takaichi is expected to present her plans for a possible dissolution of the lower house on January 19. Additionally, the yen has strengthened slightly, prompting concerns over potential intervention by Japanese authorities, which could negatively impact the earnings prospects for Japan’s export-driven industries. Among the major stocks that declined, Tokyo Electron saw a 1.6% decrease, Mitsubishi UFJ fell by 1.2%, Sony Group dropped 1.6%, Sanrio lost 2.1%, and Hitachi decreased by 2.1%.