* Fed upgrades economic view, on track to rate hikes * Komatsu, Hitachi Construction fall sharply after earnings * Canon disappoint investors, a weaker yen only bright spot * Market supported by buying from BOJ, pensions – analysts By Hideyuki Sano TOKYO, Jan 29 (Reuters) – Japan’s Nikkei average slipped on Thursday in sympathy with falls in Wall Street shares following the Fed’s unwavering stance on rate hikes, with construction equipment makers badly hit by disappointing earnings.
Still, analysts say the Tokyo market appears to have a firmer support than U.S. peers for now, due to expectations of buying by the Bank of Japan and public pension funds.
The Nikkei fell 0.4 percent to 17,717.99 from Wednesday’s one-month closing high. But it was still up 1.5 percent on the month, compared to 2.7 percent fall in the U.S. S&P 500, which fell 1.4 percent on Wednesday.
The Federal Reserve unexpectedly lifted its view on the economy, signalling the U.S. central bank remains firmly on track with plans to raise interest rates this year.
“The markets were a bit surprised that the Fed was more hawkish than expected, especially considering that many people had thought that the board members this year would be more dovish than last year’s,” said Hideyuki Ishiguro, senior strategist at Okasan Securities.
Four voting members from regional Feds at the policy committee this year are considered less hawkish than last year’s rotating members.
Leading the losses in the Tokyo bourse were construction equipment makers, which reported disappointing earnings on Wednesday.
Hitachi Construction fell 9.0 percent and Komatsu shed 7.0 percent.
“Resource development is likely to be stagnant due to low oil prices so they will likely be affected. There is an increasing concern on their outlook not just for this financial year but for the next financial year,” said Masahiro Ayukai, senior investment analyst at Mitsubishi UFJ Morgan Stanley Securities.
Some companies had little to cheer other than the boost from a weaker yen.
Canon shares dropped 4.9 percent as the camera maker reported sluggish sales of digital cameras, which face an increasing competition from improvements in smartphone cameras.
Nintendo fell 6.1 percent after the gamemaker cut its profit outlook due to weak sales, halving its annual operating profit estimate for the year to March.
Still, market participants also noted that Japanese share prices have been resilient this week, closing higher than opening levels for three days in a row.
Many analysts suspect buying by the Bank of Japan, and possibly by public pension funds, is underpinning the market.
The broader Topix fell 0.7 percent to 1,420.51 while the JPX-Nikkei Index 400 lost 0.7 percent to 12,880.94.
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