Nikkei edges up, gains limited as market cautious on Fed outlook

Reuters Tokyo | Updated on January 17, 2018 Published on August 22, 2016

Japan’s Nikkei share average edged up on Monday morning, but the gains were limited as investors were cautiously focused on this week’s meeting of global central bankers in Jackson Hole, Wyoming, where the US Federal Reserve may provide an insight on the rate outlook.

The Nikkei rose 0.3 per cent to 16.598.25 in mid-morning trade.

Traders said that anticipation of Thursday’s Jackson Hole meeting is likely to set the market direction this week, with Fed Chair Janet Yellen scheduled to speak on Friday.

“Moves in the Japanese market will likely be dominated by the dollar-yen performances after the meeting,” said Masashi Oda, general manager of the strategic investment department at Sumitomo Mitsui Trust Asset Management.

“The market could move either way, but most people want some kind of signal at this point because they have long been frustrated with no direction in the market.”

He added that investors will likely be relieved if the dollar stays between 100-105 yen.

On Monday, the dollar was up 0.4 per cent against the yen at 100.59 yen, which helped exporters.

Toyota Motor Corp rose 1.2 per cent and Honda Motor Co gained 1.6 per cent. Panasonic Corp added 1.0 per cent and Hitachi Ltd advanced 1.6 per cent.

Renesas Electronics Corp rose as much as 4.2 per cent in early morning trade before turning negative.

The Nikkei reported that the company is in the final stages of negotiation to acquire US chipmaker Intersil Corp for as much as ¥300 billion ($3 billion), but some investors have doubts about how much the deal could boost Renesas's profits.

Mining shares underperformed after oil prices fell as analysts doubted upcoming producer talks would be able to rein in oversupply. Inpex Corp dropped 3.2 per cent and Japan Petroleum Exploration Co shed 1.8 per cent.

The broader Topix gained 0.5 per cent to 1,301.76 and the JPX-Nikkei Index 400 added 0.4 per cent to 11,702.65.

Published on August 22, 2016
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