Nikkei index closed lower as investors awaited the Fed’s decision

Japan’s Nikkei index experienced a downturn on Wednesday as traders exercised caution ahead of the Federal Reserve’s monetary policy decision. Despite some recovery from early losses, the Nikkei concluded the day with a 0.3 percent decline, settling at 38,274.05 points. The broader Topix index also saw a 0.5 percent decrease, closing at 2,729.40 points.

Anticipation surrounds the Federal Reserve’s Open Market Committee meeting, widely expected to maintain interest rates amid persistent inflation. While markets have tempered expectations of a US interest rate cut this year, investors remain vigilant about Federal Reserve Chairman Jerome Powell’s stance on monetary policy in his upcoming press conference.

The substantial interest rate differential between Japan and the United States continues to weigh on the yen, prompting concerns about its potential impact on the economy and consumer behavior. Investors remain wary of potential currency interventions by authorities, with doubts lingering over Tokyo’s actions in this regard.

Among the components of the Nikkei index, 151 stocks saw declines compared to 72 that rose. Heavyweights such as SoftBank Group and Fast Retailing experienced losses of 1.6 percent and nearly 1 percent, respectively.

On the positive side, shares of Lasertec, a chip-related equipment manufacturer, surged 14.9 percent following earnings that exceeded estimates in after-hours trading on Tuesday. Additionally, West Japan Railway Company saw an 8.6 percent increase after announcing plans to repurchase 4.1 percent of its shares.

However, JGC Holdings shares faced significant losses, dropping 11.4 percent amid disappointing revenue expectations.