Japan Market extends losses on stronger yen

Japan share market finished lower for second straight session on Monday, 16 January 2023, on cautious ahead of a Bank of Japan meeting later this week, with traders speculating on whether it could further tweak its policy.

The central bank took the market by surprise last month with its decision to allow long-term interest rates to move in a broader range, a move many market players saw as an effective interest rate hike.

The 225-issue Nikkei Stock Average index stumbled 297.20 points, or 1.14%, to finish at 25,822.32. The broader Topix index of all First Section issues on the Tokyo Stock Exchange declined 16.77 points, or 0.88%, to 1,886.31.

Automakers and precision instrument manufacturers were lower on the yen's strength, while bank stocks also dropped on profit-taking.

ECONOMIC NEWS: Japan Producer Prices Rise 0.5% In December- Producer prices in Japan were up 0.5% on month in December, the Bank of Japan said on Monday - slowing from the upwardly revised 0.8% increase in November (originally 0.6%). On a yearly basis, producer prices jumped 10.2% - up from the upwardly revised 9.7% spike in the previous month (originally 9.3%). Export prices were flat on month and up 1.3% on year, the bank said, while import prices eased 0.1% on month and climbed 8.1% on year last month.

CURRENCY NEWS: The yen stood at 128.24 against US dollar, depreciated 0.29% from previous day close of 127.83, after trading in the range between 127.24-128.20. The yen has appreciated rapidly on signs the US Federal Reserve will slow its rate hikes and the Bank of Japan's decision last month to pivot away from its long-standing ultra-loose monetary policy. The Japanese central bank said it would loosen its grip on yields and allow those on certain government bonds to move in a wider band.

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