Thursday, 9 February, 2023

Tokyo stocks open higher ahead of BoJ decision

Tokyo stocks open higher ahead of BoJ decision

TOKYO: Tokyo stocks opened higher Wednesday encouraged by a stable dollar-yen rate, as investors awaited the result of a Bank of Japan policy meeting that could potentially rattle financial markets.

The benchmark Nikkei 225 index was up 0.54 percent, or 140.57 points, at 26,279.25 in early trade, while the broader Topix index added 0.42 percent, or 7.92 points, to 1,910.81, reports AFP.

The dollar fetched 128.45 yen in early Asian trade, against 128.13 yen in New York.

Global stocks were mixed overnight following data showing China's growth slowed sharply in 2022, while European gas prices hit another 16-month low.

On Wall Street, the blue-chip Dow Jones index tumbled following disappointing results from major investment bank Goldman Sachs and insurer Travellers ahead of key economic data due later in the week.

Traders are now awaiting a key policy decision by the Bank of Japan (BoJ) later Wednesday, which comes after it surprised markets last month by announcing a tweak to its ultra-loose monetary policy, sending the yen soaring.

"Japanese shares are seen starting in positive territory as the value of the yen is stable," Monex senior market analyst Toshiyuki Kanayama said in a note.

Most BoJ watchers expect that the central bank will keep its monetary policy intact, but "with potentially greater flexibility" to a key policy tool, said Stephen Innes, managing partner of SPI Asset management said in a commentary.

A second consecutive policy tweak, "even if still characterised as a technical adjustment, (means) the market would likely press more aggressively against" the bank's efforts to control long-term rates and prepare for a nearer-term exit from easing, he said.

In Tokyo, some exporters were higher, with Olympus trading up 1.05 percent at 2,355 yen, Hitachi up 0.73 percent at 6,505 yen, and chip-testing equipment maker Advantest up 0.98 percent at 9,280 yen.

Nissan was down 0.66 percent at 420.6 yen a day after a source confirmed earlier reports that Nissan and Renault are nearing a "historic" rebalancing of their auto alliance, with a deal likely to be announced in the coming weeks.

Its rivals were also lower, with Toyota trading down 0.75 percent at 1,849 yen and Honda off 0.68 percent at 3,073 yen.

Banks were lower, with Mitsubishi UFJ Financial trading down 1.70 percent at 934.4 yen, Mizuho Financial off 1.29 percent at 1,982.5 yen, and Sumitomo Mitsui Financial down 1.74 percent at 5,423 yen.