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Tokyo stocks fall in morning ahead of Fed meeting outcome

A woman walks by an electronic stock board of a securities firm in Tokyo, on Sept. 22, 2021. (AP Photo/Koji Sasahara)

TOKYO (Kyodo) -- Tokyo stocks dropped Wednesday morning with investors cautiously awaiting the outcome of the U.S. Federal Reserve's policy meeting, although the market regained some calmness after Chinese property developer Evergrande Group said it will make a bond interest payment the following day.

    The 225-issue Nikkei Stock Average shed 174.29 points, or 0.58 percent, from Tuesday to 29,665.42. The key index briefly moved into positive territory after the Chinese real estate giant's unit said Wednesday it would make an onshore bond interest payment on Thursday.

    The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 14.56 points, or 0.71 percent, at 2,049.99.

    Decliners were led by wholesale trade, machinery and food issues.

    The U.S. dollar held firm in the lower 109 yen range as the news of Evergrande's coupon payment eased some nervousness over the debt-laden Chinese property giant, which was feared to default ahead of a looming payment deadline this week.

    At noon, the dollar fetched 109.43-44 yen compared with 109.17-27 yen in New York and 109.63-65 yen in Tokyo at 5 p.m. Tuesday.

    The euro was quoted at $1.1725-1725 and 128.32-36 yen against $1.1720-1730 and 128.03-13 yen in New York and $1.1726-1727 and 128.55-59 yen in Tokyo late Tuesday afternoon.

    The benchmark Nikkei shed over 250 points at one point, although it briefly turned higher before sinking back into negative territory toward the end of the morning session.

    The market remained top-heavy ahead of the conclusion of the U.S. central bank's two-day policy meeting Wednesday, during which policymakers are expected to discuss the timeline for stimulus tapering and how often they think the country's economy will need interest rate increases over the next three years.

    "Concerns had been growing about a faster pace of tightening," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. "How many rate hikes will be forecast (by the Fed) for 2023 and 2024 is drawing attention among market participants."

    On the First Section, declining issues outnumbered advancers 1,724 to 387, while 76 ended the morning unchanged.

    Mizuho Financial Group declined 16.0 yen, or 1.0 percent, to 1,586.0 yen following reports that Japan's financial regulators plan to issue a business improvement order to the group and its banking arm Mizuho Bank over a string of system failures this year.

    Mitsubishi UFJ Financial Group rose 13.8 yen, or 2.2 percent, to 646.3 yen after it said Tuesday it will sell most of its American banking unit MUFG Union Bank to U.S. Bancorp in a deal worth around $17.6 billion.

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