Japan Market edges up after Tokyo inflation hits near 42-year high

Japan share market finished marginally higher on Friday, 27 January 2023, as caution over a potential policy tweak by the Bank of Japan toward monetary tightening after higher-than-expected inflation in the capital for January

The 225-issue Nikkei Stock Average index advanced 19.81 points, or 0.07%, to finish at 27,382.56. The broader Topix index of all First Section issues on the Tokyo Stock Exchange inclined 4.26 points, or 0.22%, to 1,982.66.

Total 17 of 33 industry categories of the broader Topix index advanced, with banks, iron & steel, electric power & gas, insurance, and chemical issues being notable gainers, while marine transportation, precision instruments, and pharmaceutical sectors being notable gainers.

Shares of banks and financials advanced on speculation the strong CPI may prompt the BOJ to push forward with monetary tightening, which would boost their profits. Mitsubishi UFJ Financial Group rose 2.7% to 978.0 yen.

Export-oriented issues dropped on the stronger yen. Optical equipment maker Olympus slid 2.1% to 2,404.5 yen. Medical equipment maker Terumo lost 1.9% to 3,753 yen.

ECONOMIC NEWS: Core consumer prices in Japan's capital Tokyo rose 4.3% in January from a year earlier, marking the fastest annual gain in nearly 42 years and keeping the central bank under pressure to phase out economic stimulus. It followed a 3.9% rise in December and stayed above the central bank's 2% target for an eighth straight month, data showed on Friday.

CURRENCY NEWS: The yen and the yield on the 10-year Japanese government bond rose after the Tokyo consumer prices data release, reflecting market expectations that rising inflation could prod the Bank of Japan to soon dial back stimulus.The yen stood at 129.90 against US dollar, appreciated 0.3% from previous day close of 130.21, after trading in the range between 129.51-130.27.

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