Japan’s Nikkei hits 2-wk high as mood improves before U.S. CPI, Fed meet

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TOKYO — Japan’s Nikkei share average rose on Tuesday, briefly topping the psychologically key 28,000 level for the first time since the start of the month, as investors readied for key U.S. inflation data and the Federal Reserve’s policy decision.

The Nikkei opened brightly, hitting a high of 28,116.56 – a level not seen since Dec. 1 – but then gradually pared those gains to close the morning session 0.37% higher at 27,946.09.

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The broader Topix added 0.52% to 1,967.48.

The advance followed strong gains on Wall Street overnight, with the S&P 500 rallying 1.43%.

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The U.S. consumer price report later in the day will be closely monitored as recent data has suggested that inflation remains sticky, reducing optimism that the Fed may soon pivot following a series of aggressive interest rate increases.

The U.S. central bank is widely expected to hike by 50 basis points (bps) on Wednesday, down from the 75 bps pace of the last four meetings.

“Today, unfortunately, there don’t seem to be any strong trading cues,” meaning market direction will continue to be dictated by caution before U.S. CPI, Kazuo Kamitani, a strategist at Nomura in Tokyo, said in a conference call with journalists.

“Can the Nikkei close above 28,000? Can it stay over the 25-day moving average (of around 27,946)? I’d like to keep an eye on that as I watch the market today.”

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Of the Nikkei’s 225 component stocks, 167 rallied versus 50 that fell, with eight flat.

Every sector was higher, although real estate was closer to flat. Energy led the advance, climbing 1.26% amid higher crude prices.

Uniqlo store operator Fast Retailing gained 0.89%, adding 25 index points to the Nikkei and making it the benchmark’s biggest support.

An overnight weakening of the yen buoyed exporters, as it lifts the outlook for repatriated earnings.

Honda rose 1.63% and Toyota gained 0.43%, while Nintendo added 0.49%.

Chip-related shares continued to be weak though, with Tokyo Electron down 0.49%, shaving 7 1/2 points off the Nikkei and making it the biggest drag. (Reporting by Kevin Buckland; Editing by Savio D’Souza)



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