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Tokyo stocks flat ahead of Fed, BOJ meeting outcomes

TSE (Kyodo)

TOKYO (Kyodo) -- Tokyo stocks ended flat Wednesday as investors awaited the results of monetary policy meetings in the United States and Japan as well as the lineup of the Cabinet under a new Japanese prime minister.

    The 225-issue Nikkei Stock Average ended up 20.64 points, or 0.09 percent, from Tuesday at 23,475.53. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 3.51 points, or 0.21 percent, higher at 1,644.35.

    Gainers were led by information and communication, and food issues, while marine transportation and rubber product issues were among decliners.

    The U.S. dollar hovered in the lower 105 yen range, capped by expectations of further monetary easing by the U.S. Federal Reserve at the end of its two-day policy meeting later in the day, dealers said.

    At 5 p.m., the dollar fetched 105.24-26 yen compared with 105.39-49 yen in New York and 105.74-75 yen in Tokyo at 5 p.m. Tuesday.

    The euro was quoted at $1.1860-1862 and 124.82-86 yen against $1.1841-1851 and 124.87-97 yen in New York, and $1.1880-1882 and 125.62-66 yen in Tokyo late Tuesday afternoon.

    The yield on the benchmark 10-year Japanese government bond was unchanged from Tuesday's close at 0.015 percent.

    The Bank of Japan began its two-day meeting. The central bank is expected to continue with its massive monetary stimulus to support the economy hit by the coronavirus pandemic, in cooperation with the government led by Yoshihide Suga, who was elected prime minister by parliament in the afternoon.

    Investors also took to the sidelines before the announcement of members of Suga's Cabinet, expecting him to retain economic ministers, including Finance Minister Taro Aso, from the previous administration under Shinzo Abe and inherit the "Abenomics" policy mix of monetary and fiscal stimulus as well as structural reforms, brokers said.

    Although a wait-and-see mood prevailed, "the market was well supported by expectations for the Suga administration, which triggered buying of a broad range of issues sensitive to domestic demand," said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.

    Suga's stated policy goal of boosting digitalization lifted related issues.

    Focus System, an infrastructure-related software company, jumped 44 yen, or 4.9 percent, to 946 yen, while ITbook Holdings, a consulting firm listed on the Tokyo bourse's Mothers market for startups, surged 69 yen, or 9.8 percent, to 774 yen.

    Companies that handle hometown tax donations under the Furusato Nozei system, created by Suga in 2007 to encourage tax-deductible donations to local municipalities, were also higher. Change soared 870 yen, or 9.1 percent, to 10,390 yen.

    Bucking the upward trend, exporters were hit by the yen's firmness. Honda Motor shed 70.00 yen, or 2.6 percent, to 2,629.50 yen, while tire maker Bridgestone declined 72 yen, or 2.1 percent, to 3,438 yen.

    On the First Section, advancing issues outnumbered decliners 1,357 to 732, while 85 ended unchanged.

    Trading volume on the main section came to 1,168.86 million shares compared with Tuesday's 1,171.72 million shares.

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