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Tokyo stocks close lower, investors awaiting Fed meeting with caution

TOKYO
2021-11-02 16:06

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TOKYO, Nov. 2 (Xinhua) -- Tokyo stocks closed lower Tuesday over selling to lock in gains following the Nikkei index's one-month high on the previous day, as investors became cautious ahead of a two-day U.S. Federal Reserve policy meeting.

The 225-issue Nikkei Stock Average finished down 126.18 points, or 0.43 percent, from Monday at 29,520.90.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 13.05 points, or 0.64 percent, lower at 2,031.67.

Declining issues were led by insurance, nonferrous metal and securities house issues.

The drop in stocks came one day after the Nikkei index climbed to a one-month high, rising over 2.6 percent, as the Japanese ruling coalition secured a victory in Sunday's general election.

The market is looking for hints that suggest interest rate hikes may be earlier than expected, and awaiting the Fed chief's comments on the inflation outlook. Investors have taken the decision at the Fed meeting into consideration which is on tapering the U.S. central bank's bond purchases.

"Investors are watching closely how long (the Fed) will take to complete the tapering" before raising rates, said Shingo Ide, chief equity strategist at NLI Research Institute.

"The shorter the tapering period, the more the market would be wary of a sooner-than-expected rate hike ... which will then hurt stock markets," Ide added.

On the First Section, decliners outnumbered advancers 1,585 to 538, while 60 finished unchanged.

Investors locked in gains on some technology issues, with semiconductor maker Screen Holdings dropping 0.6 percent and electronic parts maker Murata Manufacturing declining 1.6 percent.

Export-related issues also went down on the yen's slight gain, as a strong yen has weakened the overseas profits of Japanese companies when they were repatriated.

Panasonic fell 1.0 percent and Sharp shrank 1.3 percent. Honda Motor slid 0.7 percent.

Trading volume on the main section declined to 1,183.56 million shares from Monday's 1,285.90 million shares.
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