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Japan’s Nikkei index concluded the week on a lower note, experiencing profit-taking activities and heightened speculation surrounding the Bank of Japan’s potential departure from ultra-loose monetary policies, marking its first weekly decline in six weeks.
Friday’s Market Performance
The Nikkei index managed to close slightly higher on Friday, edging up by 0.2 percent to reach 39,688.94 points. However, it retreated from its intraday peak of 39,989.33 points.
Weekly Performance and Shift in Sentiment
Despite Friday’s modest gains, the index recorded a weekly decline of 0.6 percent, halting its five-week winning streak. The recent surge that propelled the index beyond its 1989 record high level faced headwinds due to profit-taking activities and renewed expectations regarding the Bank of Japan’s monetary policy stance.
Factors Influencing Market Momentum
The index’s momentum slowed following its historic breach of the 40,000-point mark earlier in the week, with profit-taking activities intensifying and the yen strengthening amidst speculation surrounding the Bank of Japan’s upcoming meeting on March 18-19.
Sectoral Performance Highlights
The auto sector witnessed a decline on Friday, primarily attributed to the yen’s strength. Market heavyweight Toyota Motor recorded a loss of 1.4 percent, while Subaru and Suzuki Motor declined by 3.2 percent and 2.1 percent, respectively.
Conversely, the banking sector observed a notable rise of 2.1 percent, marking its best weekly performance since September. Growing anticipation of the Bank of Japan’s potential policy adjustment fueled investor optimism.
Technology Sector and Broader Market Overview
Technology-heavy stocks experienced mixed performance, with chip-making equipment giant Tokyo Electron posting a modest gain of 0.8 percent, while chip-testing equipment maker Advantest saw a decline of 0.6 percent.
The broader Topix index closed 0.3 percent higher at 2,726.80 points, registering a weekly gain of 0.6 percent despite the Nikkei’s downturn.
Conclusion
The Nikkei’s weekly decline reflects evolving market sentiment influenced by profit-taking activities and speculation surrounding the Bank of Japan’s policy trajectory. Investors remain vigilant amid shifting dynamics, navigating sectoral performances and policy developments for strategic decision-making.
