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Japan's Nikkei share average inched up in choppy trade on Thursday morning, underpinned by record US closing highs after the Federal Reserve signalled some concern about slow inflation, while Nintendo soared after its profit beat market expectations.
After opening lower, the Nikkei erased losses and was up 0.2 per cent at 20,093.41 at the end of the morning session.
Fed policy decision
The Fed maintained its benchmark lending rate and said it was continuing the slow path of monetary tightening. The central bank said it expected to start winding down its massive holdings of bonds "relatively soon” in a sign of confidence in the US economy, but it noted that both overall inflation and a measure of underlying price gains had declined.
“The Fed's decision first seemed to have suggested a dovish tone, and the dollar dropped. U.S. long-term yields are expected to be on the defensive, and it would serve as a tailwind to Japanese stocks,” said Masayuki Kubota, chief strategist at Rakuten Securities.
“The Nikkei will likely stay in a narrow range near the 20,000-mark for a while.”
Analysts also said that the market will be focused on individual earnings releases for the time-being, as Japanese companies report their April-June results.
Nintendo Co was up 6.6 per cent at midday after touching four-week highs. It was the most traded stock by turnover after the console maker said it swung to a profit in the first quarter, beating analyst estimates, due to strong demand for its Switch console.
Elsewhere, Hitachi Kokusai Electric rose 4.3 per cent after the electronic equipment manufacturer raised its earnings outlook for the year ending March 2018. It now expects an operating profit of 22.5 billion yen, up from previously forecast 17.5 billion yen, thanks to increased capital spending by chip makers.
Banks and insurers underperformed. Mitsubishi UFJ Financial Group dropped 0.6 per cent, Sumitomo Mitsui Financial Group fell 0.9 per cent and Dai-ichi Life Holdings declined 0.8 per cent.
The broader Topix advanced 0.4 per cent to 1,627.23.
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