Tokyo shares opened lower Tuesday as investors focus on a pair of US and Japanese central bank meetings, while Takata dived on news the troubled airbag supplier is going up for sale.
Japanese markets reopened after a public holiday Monday with all eyes on the Bank of Japan’s two-day policy meeting and a US Federal Reserve gathering, both of which wrap up on Wednesday, reports BSS.
The BoJ will be issuing a closely watched report card on its own monetary policy, more than three years after launching a massive monetary easing plan aimed at deflation and tepid growth.
It is not clear if Japan’s central bank will unleash more stimulus measures to boost the still-weak economy, while the Fed keeps markets guessing on whether it’s ready to raise interest rates.
“We don’t know what awaits, with both the US and Japanese monetary policy meetings ahead of us,” Hiroyasu Iida, the head of investment research centre at Aizawa securities, told Bloomberg News.
“It’s difficult to buy into the market when you don’t know what will happen.”
Chris Weston, chief market analyst in Melbourne at IG, added that “no one is prepared to take on too much risk ahead of the Bank of Japan and the Fed Open Market Committee meetings”.
“The key this week for me is how the Japanese and US fixed income markets react to either central bank decisions,” he said.
“If real bond yields start moving up it will cause a tightening of financial conditions that will not be taken well by the credit or equity markets.”
In early trading, the benchmark Nikkei 225 index slipped 0.70 percent or 116.07 points to 16,403.22, while the Topix index of all first-section issues fell 0.48 percent, or 6.33 points, at 1,305.17.
Takata shares dived almost nine percent to 385 yen, on the back of reports that the embattled firm is seeking bidders as it tries to recover from the auto industry’s biggest safety recall.
A defect in Takata’s airbags can cause them to deploy with excessive force, hurtling shrapnel at a vehicle’s occupants. The problem has been linked to at least 15 deaths and scores of injuries globally.
On forex markets, the dollar was at 101.85 yen, little changed from 101.88 in New York. Overnight, global investors pushed up European shares as a boost in oil prices lifted the markets’ spirit, while Wall Street issues ended down or flat.
