Japan's Nikkei under pressure again after BOJ meeting minutes

Lasertec

08/08/2024 07:22

(Updates at 0600 GMT)
       TOKYO, Aug 8 (Reuters) - Japanese shares were under
fresh pressure on Thursday as domestic chip stocks followed a
slide on Wall Street overnight and as more details from the Bank
of Japan (BOJ) pointed to hawkishness and further monetary
tightening.
    The Nikkei index  .N225  was volatile, ending lower as
investors struggled for direction, following its plunge on
Monday and subsequent recovery.
    Insights from the BOJ also revived expectations of more
unwinding of yen carry trades, after the central bank's release
of minutes of its July meeting.
    The Nikkei index fell 0.74% to close at 34,831.15. It was at
one point down as much 2.5% and up 0.8%. Following the
roller-coaster 12.4% plunge on Monday and bounce on Tuesday, the
index is down roughly 20% from its July peak above 42,000.
    The broader Topix  .TOPX  fell 1.11% to 2,461.7.
        The volatility prompted the finance minister to say
authorities are closely watching stock market developments, but
that they are not ready to take action.
    Earlier in the day, details from the Bank of Japan pointed
to hawkishness and further monetary tightening as the central
bank released minutes of its July meeting.
        Some BOJ board members called for the need to keep
raising interest rates, with one saying they should eventually
be increased to at least around 1%, a summary of opinions voiced
at the July 30-31 meeting showed on Thursday.
    At the July meeting, the BOJ raised its short-term policy
target to 0.25% from a range of 0% to 0.1%, driving expectations
the rate could be raised to as high as 0.5% this year.
    Markets had rallied and the yen  JPY=  had slipped on
Wednesday when the BOJ's influential Deputy Governor Shinichi
Uchida said the bank will not raise rates when markets are
unstable.
    "Investors may resume yen carry trade once the global
markets turn stable, which will push the yen's value lower and
that will lift Japanese equities," said Toru Sasaki, chief
strategist at Fukuoka Financial Group.
    "If the BOJ does not raise its policy rate, Japan's real
interest rates will remain negative, which also weakens the yen
and pushes up equities."
     
    Among individual stocks, chip-making equipment maker Tokyo
Electron  8035.T  slipped 0.4% whereas peer Lasertec  6920.T 
surged 22.6% - giving the Nikkei its biggest boost - after
saying its annual net profit will likely rise 25%.
    Chip-testing equipment maker Advantest  6857.T  fell 4%.
    Nitori Holdings  9843.T  jumped 8% after the home interior
goods retailer said its quarterly recurring profit rose 7.5%. 
    Fuji Soft  9749.T  surged 20% to its daily limit high after
local media reported U.S. investment fund KKR & Co  KKR.N  plans
to help the software developer go private under a management
buyout worth about 600 billion yen ($4.09 billion).
    
($1 = 146.6100 yen)

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Nikkei vs yen    https://reut.rs/3AcbM5e
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Junko Fujita; Editing by Vidya Ranganathan and
Christopher Cushing)
 ((junko.fujita@thomsonreuters.com;))