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Japan’s Nikkei set to snap 7-day winning streak; Fed meet, U.S. GDP in focus

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TOKYO — Japan’s Nikkei fell on Monday after rising for seven straight days, dragged by technology heavyweights as they tracked Wall Street’s weakness in the previous session, with caution kicking in ahead of the U.S. Federal Reserve’s meeting this week.

By 0206 GMT, the Nikkei share average was down 0.8% at 27,691.14, retreating from a six-week high marked on Friday. The broader Topix slipped 0.65% to 1,943.17.

Focus is now on the Fed’s meeting and second-quarter U.S. gross domestic product data this week. While the U.S. central bank is expected to raise interest rates by 75 basis points, the GDP data is likely to be negative again.

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“Investors want to gauge the direction of the stock markets after seeing the outcome of the FOMC (U.S. Federal Open Market Committee) and the GDP,” said Ikuo Mitsui, fund manager at Aizawa Securities.

“Looking at the PMI data that was out last week, the economy is obviously slowing down.”

Business activity in the United States, the world’s largest economy, contracted for the first time in nearly two years this month, activity in the euro zone retreated for the first time in over a year, and growth in Britain was at a 17-month low, purchasing managers’ surveys said last week.

In Japan, silicon-wafer maker Shin-Etsu Chemical dragged the Nikkei the most, falling 2.85%, followed by robot maker Fanuc which lost 2.18%. Air-conditioning maker Daikin Industries fell 1.85%.

Defensive shares were strong with the railway sector rising 1.21% to be the top gainer among the Tokyo Stock Exchange’s 33 industry sub-idexes. The utility sector rose 1.09%. (Reporting by Junko Fujita; editing by Uttaresh.V)



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