Nikkei dips on more powerful yen, jitters ahead of BOJ decision

* Nikkei down 0.1 pct, Topix slips 0.3 pct * Yen hits 2-1/2- week high vs dollar, weighs on Nikkei * Market wary before BOJ choice amid established easing
hopes By Shinichi Saoshiro TOKYO, July 29 Japan’s Nikkei share average
dipped on Friday, weighed down by a more powerful yen and uncertainty
over whether the Bank of Japan will ease policy later on in the
day. The Nikkei was down 0.1 percent at 16,458.93 points
by mid-morning.

The index had actually increased to a seven-week high of 16,938.96 last
week, assisted by expectations that Japan’s federal government and central
bank would provide a double dosage of fiscal and monetary stimulus. With the federal government already poised to release a large fiscal
stimulus plan next week, the focus has turned to the main
bank and whether it will match Tokyo’s spending with financial
relieving. Traders commonly anticipate the BOJ to increase its currently
huge purchases of federal government bonds and some riskier possessions
such as ETFs and potentially REITs. It might likewise cut rate of interest
deeper into unfavorable area, which might hit banking stocks.

However market expectations are so high, that even those
steps may not suffice to slow yen gains for long. “The marketplace’s expectations to the BOJ easing policy are
strong, but it has to wait until the central bank’s actual
announcement, with the more powerful yen dictating relocations up until then,”
said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui
Possession Management in Tokyo. The dollar was down 0.8 percent at 104.41 yen after
touching 103.30, its least expensive in 2-1/2 weeks.

Sony Corp was up 2.2 percent after the electronics
conglomerate stated on Thursday it has actually agreed to sell a part of
its batter company to Murata Production Co Ltd in
reaction to a slowing need for mobile phones. Murata fell 2.6 percent after it stated its operating earnings
for April-June dropped 23.9 percent on the year. Nomura Holdings increased 6.7 percent after the company
stated on Thursday it will redeem as much as 2.6 percent of its own
shares. Another gainer following a share redeem statement was
Fujikura Ltd, which increased 9.9 percent. The producer
of electrical equipment and interactions systems will redeem
as much as 3.39 percent of its own shares. The broader Topix slipped 0.3 percent to 1,303.39
and the JPX-Nikkei Index 400 was down 0.2 percent at
11,723.79.

( Modifying by Kim Coghill).

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