Japanese stocks end lower ahead of BoJ, Fed meetings

Japanese stocks closed lower on Monday as possible changes this week in the Bank of Japan’s monetary policy weighed on sentiment, while quarterly earnings were also in focus.

Japan’s Nikkei share average closed down 0.74 per cent at 22,544.84.

The broader Topix ended 0.43 per cent lower at 1,768.15 while the JPX-Nikkei Index 400 dipped 0.47 per cent to 15,620.76.

Investors were cautious ahead of key central bank meetings, including by the BoJ and US Federal Reserve.

The Bank of Japan will end a two-day meeting on Tuesday amid speculation it could roll back its purchases in the Nikkei-linked exchange-traded funds.

Of Tokyo’s 33 sub-indexes, 21 ended the day in negative territory, reports Reuters.

Bucking the overall trend, the banking sector ended 1.6 per cent higher on hopes that the possible tweaks to the BOJ’s policy may benefit banks’ balance sheets.

Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group ended 1.6 per cent firmer, while Mizuho Financial Group closed 1.3 per cent higher.

The biggest losers included oil and coal producers and electric and gas firms, falling 1.5 and 1.4 per cent, respectively. Shares of pharmaceutical manufacturers ended 1.4 per cent down.

The corporate earnings season is in full swing this week, and investors are keeping tabs on how companies fared in the first quarter.

Electric power supplier Kansai Electric Power Co closed 3.6 percent lower after the company reported weak April-June earnings.

Calbee ended 8.5 percent lower after the snack maker’s quarterly earnings fell short of market expectations given the firm’s already-high valuations.

Ricoh Co and Alps Electric Co closed up 8.8 and 4.7 per cent, respectively, after posting upbeat earnings.

More than 1,000 companies will report earnings this week, with 175 firms announcing results on Monday, including Orix Corp and Tokyo Electric Power Co.