Tokyo Shares Up By Break, Eyes On BoJ And Fed
Fakhir Rizvi Published September 20, 2016 | 10:10 AM
TOKYO, (UrduPoint / Pakistan Point News -20th Sept,2016) - Tokyo shares rallied to end Tuesday morning's session in positive territory ahead of key US and Japanese central bank meetings, but troubled airbag supplier Takata dived on news it is going up for sale.
The Bank of Japan heads Tuesday into a two-day policy meeting, with investors unsure about its plans for monetary policy as more than three years of stimulus has failed to boost growth and inflation.
The bank will announce its decision hours before the Federal Reserve winds up its own gathering, with opinion split on whether it will hike 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." The benchmark Nikkei 225 index, which reopened after a public holiday on Monday, added 0.11 percent, or 18.61 points, to sit at 16,537.90 by the break.
The Topix index of all first-section issues rose 0.63 percent, or 8.28 points, to 1,319.78. Takata dived 13.23 percent to 367 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.
The Dollar bought 101.89 yen, little changed from 101.88 in New York as investors bide their time ahead of the bank decisions. Electronics firms were among the gainers, with Sony trading up 1.98 percent at 3,335 yen and Panasonic rising 0.98 percent to 1,024.5 yen. Toyota added 2.30 percent to 6,001 yen.
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