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Japanese shares fall to two-month low ahead of BOJ decision

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TOKYO — Japanese shares declined alongside Asian peers on Thursday, as investors digested the U.S. Federal Reserve’s latest rate hike and awaited the Bank of Japan’s monetary policy decision.

The Nikkei 225 index opened down 0.95% and repeatedly tested the 27,000 psychological barrier before falling through for the first time since July 19. It closed for the break down 0.97% at 27,047.37. The broader Topix fell 0.64%.

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Apart from the impact of broad losses on Wall Street after the Fed delivered a widely expected 75-basis-point rate increase and flagged more hikes, a domestic securities broker said investors were likely adjusting positions ahead of a three-day weekend in Japan.

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S&P 500 e-mini futures were last down 0.74%.

Unlike the Fed and every other major central bank this year, the BOJ is expected to stick to its dovish policy of ultra-low interest rates despite rising consumer inflation and the yen trading at historically low levels.

“While it is still hard to expect a pivot from the Bank of Japan this week, given that Governor Kuroda remains focused on achieving wage inflation, the meeting will still likely have key market implications,” Saxo Markets strategist Redmond Wong wrote in a note.

“There will likely be increased voicing of concerns by the authorities on yen weakness, and there is also some chatter around the Bank of Japan bolstering its lending programs to support the private sector as high inflation curbs spending.”

Every sector on the Nikkei saw overall losses, with 190 of the index’s 225 constituents falling, 30 making gains, and five trading flat.

Fast Retailing Co Ltd, SoftBank Group Corp , and Daikin Industries Ltd were the biggest drags on the index.

Bandai Namco Holdings Inc gained 0.55% to notch the largest positive impact. (Reporting by Sam Byford and Tokyo markets team; Editing by Subhranshu Sahu)


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