Roundup: Japan's Nikkei snaps 5-day winning streak as BOJ's decision weighs on financials-Xinhua

Roundup: Japan's Nikkei snaps 5-day winning streak as BOJ's decision weighs on financials

Source: Xinhua| 2023-03-10 18:19:00|Editor: huaxia

TOKYO, March 10 (Xinhua) -- Japan's benchmark Nikkei stock index snapped a five-day winning streak on Friday, as the Bank of Japan (BOJ) deciding to maintain its ultra-low interest rate policy saw disappointed investors dump financial issues over concerns over their outlooks.

The 225-issue Nikkei Stock Average dropped 479.18 points, or 1.67 percent, from Thursday to close the day at 28,143.97.

The broader Topix index, meanwhile, lost 39.51 points, or 1.91 percent, to finish at 2,031.58.

Dealers here highlighted the BOJ opting Friday to maintain its ultra-easy monetary policy, despite rising inflation and the yen's recent weakness.

In addition to freezing short-term interest rates at minus 0.1 percent and guiding 10-year Japanese government bond yields to around zero percent, the bank also said its yield on 10-year Japanese government bonds would be kept at a range of plus and minus 0.5 percent and unlimited amounts of 10-year bonds would continue to be purchased to defend its upper limit on the key yield.

Some investors believed that the central bank, at the conclusion of its two-day policy setting meeting, chaired for the last time by outgoing BOJ Governor Haruhiko Kuroda, may have changed the cap on its yield curve control program and possibly remove the limit, market strategists said.

The move would have been interpreted as similar to a rate hike and a possible signal of the central bank's future plans to exit from its lengthy monetary easing policy, which would have been a boon for financial oriented-stocks, analysts here said.

"The change in the yield curve control program, including a removal of the cap, could be perceived as similar to a rate hike and would have been a positive factor for bank shares," Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute, was quoted as saying.

Adding to downward pressure on financial and related issues here, U.S. banking shares losing ground overnight weighed, with domestic issues coming under increased pressure in later trade, market strategists here said.

Similarly, high-technology issues were also dragged down by their U.S. peers underperforming on Wall Street overnight.

Among financials retreating, Mitsubishi UFJ Financial Group slumped 6.1 percent, while Sumitomo Mitsui Financial Group dropped 5.3 percent.

The Nikkei's biggest decliner was lender Resona Holdings, which tumbled 7.5 percent, while Chiba Bank ended 7.3 percent lower.

It was a similar day for technology shares, with Nikkei heavyweight startup investor SoftBank Group weighing on the broader market by falling 6.2 percent, while Recruit Holdings lost 3.3 percent and Rakuten Group finished 4.1 percent lower.

By the close of play, bank, marine transportation and insurance-oriented issues comprised those that declined the most.

The turnover on the last trading day of the week came to 4,156.64 billion yen (30.42 billion U.S. dollars).