Japan shares close stable, with anticipation of the US and Japanese central meetings

Japanese stocks posted slight gains on Tuesday as investors awaited the outcome of this week’s meetings of the Federal Reserve and the Bank of Japan, as the two banks are expected to reinforce their hawkish policies to tackle inflation.

With the markets resuming trading after a national holiday, the Nikkei index opened up 0.8 percent and rose to 1.23 percent before paring its gains later to close 0.44 percent higher at 27,688.42 points.

The broader Topix index also increased 0.45 percent.

Markets are already expecting a US interest rate hike of at least 75 basis points, with an 18 percent chance of a full percentage point hike.

However, the Bank of Japan is expected to break with the mainstream among central banks by refusing to raise interest rates, even as inflation rises. On Tuesday, Japanese data reported that the core consumer inflation index touched an eight-year high in August.

While consumer inflation of 2.8 percent is lower than that of many other countries around the world this year, it represents a fifth consecutive month higher than the Bank of Japan’s 2 percent target, an increase driven in part by a significant depreciation of the yen.

Out of the 225 stocks on the Nikkei index, 162 gained, 56 losses were incurred, 46 increased, and seven settled without little change.

Technology stocks led the index upward. Mobile phone operator KKDI Corp had a strong impact, as its share rose 1.77 percent, while electrical components maker TDK Corp rose 2.72 percent.

Materials manufacturer Unitica witnessed the largest single rise on the Nikkei index, as it rose 7.33 percent, while shipping company Kawasaki Kisen Kaisha recorded the largest loss, as it fell 3.28 percent.