Japan’s Nikkei share average dropped on Tuesday morning to one-one and a half-week low as Wall Street languished and the dollar fell against the yen ahead of the US Federal Reserve’s two-day policy meeting, hurting exporter shares.
The Nikkei fell 1.3 percent to 16,400.47 in mid-morning trade, after falling to as low as 16,344.34, the lowest level since July 14.
Exporters were sold after the dollar slipped 0.9 percent against the yen to 104.87, with Toyota Motor Corp shedding 1.5 percent and Honda Motor Co sliding 1.7 percent.Traders said that uncertainty over the Bank Of Japan’s policy decision at its two-day meeting starting Thursday is making investors risk averse.
“As expectations for helicopter money waned while there are limited actions left from the BOJ,” said Nobuhiko Kuramochi, a chief strategist and economist at Mizuho Securities. He said that the central bank may expand its bond-buying programme and cut interest rates further into negative territory, which could affect the yen moves.
“On the other hand, there are positive catalysts as hopes for the government to launch a massive fiscal stimulus programme, but the figure may not come soon, so the market may stay cautious for a while,” Kuramochi said.
Financial stocks lost ground. Nomura Holdings stumbled 3.1 percent, Mitsubishi UFJ Financial Group dropped 2.7 percent and Mizuho Financial Group shed 1.8 percent.
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Construction equipment makers underperformed after Caterpillar Inc said its global retail machinery sales declined 12 percent for the three months ended June 30 as demand for heavy machinery remained sluggish in the company’s core markets. Komatsu Ltd tumbled 2.9 percent and Hitachi Construction Machinery dived 3.1 percent.
On the other hand, SoftBank Group Corp climbed more than 4 percent after its unit Sprint Corp reported better-than-expected first-quarter revenue and said it expected to be cash-flow positive next fiscal year after breaking even this year. The broader Topix dropped 1.3 percent to 1,308.69 and the JPX-Nikkei Index 400 declined 1.3 percent to 11,767.95.