Tokyo stocks open lower ahead of US Fed decision

Tokyo, Sept 18 (AFP/APP):Tokyo stocks opened lower in cautious trade on Wednesday as investors watched for the US Federal Reserve’s decision later in the day.

The benchmark Nikkei 225 index was down 0.05 percent or 10.19 points at 21,991.13 in early trade, while the broader Topix index was down 0.32 percent or 5.19 points at 1,612.96.

“After US shares ended slightly higher in a session dominated by a wait-and-see attitude, the Japanese market is seen moving in a narrow range” ahead of the US Fed’s policy decision, said Toshiyuki Kanayama, senior market analyst at Monex.

The dollar fetched 108.13 yen in Asian trade, unchanged from the level in New York late Tuesday.
Observers largely anticipate a rate cut from the Fed, but “the big question for market participants is whether the Fed will commit to more cuts,” said Edward Moya, market analyst at Oanda.

The New York Fed on Tuesday pumped billions of dollars into financial markets as a sudden cash shortage drove up interest rates on the eve of the Fed policy decision, which economists widely expect will result in a lower target rate.

“The Federal Reserve Bank of New York was forced to take action on Tuesday,” Moya noted, adding that this means the US central bank may have to do more than cutting rates.

Separately, Japan’s finance ministry said its politically sensitive trade surplus with the United States edged up 3.8 percent year-on-year in August to 472 billion yen ($4.37 billion) as imports declined further than exports.

The growth in surplus with the US is the sixth consecutive monthly rise, the ministry said minutes before the opening bell.

The figures come with Washington and Tokyo expected to ink an initial trade agreement later this month in New York.

Japan’s overall trade account showed a deficit of 136.3 billion yen, the ministry said.
Among individual stocks, Sony was down 2.64 percent at 6,369 yen after it said will keep its semiconductor operations, rejecting a proposal by the US activist hedge fund Third Point.
IT and investment giant SoftBank Group was down 1.81 percent at 4,605 yen while market heavyweight Fast Retailing, the Uniqlo casual wear operator, was up 1.08 percent at 65,540 yen.

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