Japan Indexes Tread Water Ahead of Rate Decisions and South Korea's Political Chaos

Akira Ito
04 Dec, 2024
Tokyo

Benchmark indexes in Tokyo struggled to advance following the lack of catalysts and brewing political chaos in South Korea. 

The Nikkei 225 stock average barely advanced, and the broader Topix index decreased 0.4% as investors looked forward to rate decisions by the central banks in two weeks. 

The Bank of Japan is likely to lower its benchmark rate for the third time in 2024 at the end of the last policy meeting on December 19, amid rising inflation and a string of positive economic indicators matching the expectations set by the central bank.

The U.S. Federal Reserve is expected to announce its rate decisions on December 18, and investors are divided about the possible rate cut of 25 basis points. 

The Japanese yen eased to 15.03 against the U.S. dollar as investors debated rate decisions in the U.S. and Japan. 

Investors turned cautious after South Korea's president, Yoon Suk Yeol, unexpectedly imposed martial law to avoid opposition from proceeding with his impeachment. 

President Yeol lifted the martial law after six hours, following the National Assembly rejecting the military rule, throwing the financial markets into chaos and raising political tensions in the region. 

The Finance Ministry said that the central bank is prepared to inject as much as $7.7 billion to stabilize financial markets after the benchmark index dropped as much as 2.3%. 

The Korean won dropped to a two-year low of 1,448 against the U.S. dollar but managed to recover to 1,410. 

 

Japan Stock Movers 

The Nikkei 225 stock average edged up 0.05% to 39,266.35, and the broader Topix index decreased 0.5% to 2,741.51. 

Semiconductor-related technology stocks, banks, and retail companies were in focus in Wednesday's trading in Tokyo. 

Tokyo Electron gained 0.02% to ¥24,655.0, Advantest Corp. added 0.7% to ¥8,815.0, and Disco Corp. fell 1% to ¥43,420.0. 

Mitsubishi UFJ Financial declined 1.8% to ¥1,810.0, Sumitomo Mitsui Financial dropped 2.9% to ¥3,759.0, and Mizuho Financial fell 2.9% to ¥3,810.0. 

Seven & I Holdings decreased 0.3% to ¥2,620.0, Isetan Mitsukoshi jumped 6.4% to ¥2,366.0, and Fast Retailing added 2.4% to ¥52,930.0. 

Keisei Electric Railway declined 3.5% to ¥4,325.0, and then it trimmed its November gains by half following a stake purchase by an activist investor last month.