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Japan's Nikkei share average was nearly flat in choppy trade on Thursday morning after stronger-than-expected industrial output data helped reduce expectations that the Bank of Japan will announce additional easing on Friday.
The market opened on a strong note after Wall Street surged as the US Federal Reserve, downplaying recent global market turmoil, made a direct reference to its next policy meeting that put a December rate hike firmly in play.
While investors took heart from brisk Japanese industrial output data announced before the market open, views that the BOJ will stand pat at its Friday policy meeting grew, traders said.
The Nikkei moved between positive and negative territory, shedding 0.1 per cent to 18,879.78 in mid-morning trade after earlier reaching 19,080.89. It moved closer to a resistance level traders see at its 75-day moving average of 19,103.
“Now that the Fed hints a December hike and Japan’s economic data was strong, there are growing views that the BOJ may stand pat tomorrow,’’ said Yoshihiro Okumura, an analyst at Chibagin Asset Management.
He said more investors now think the BOJ may wait to see what the Fed does in December before acting.
Japan’s industrial output rose 1.0 per cent in September, suggesting the economy is emerging from the doldrums as the pain from China’s slowdown begins to ease.
Some machinery stocks outperformed, helped by both the output data and their strong earnings results. Okuma Corp jumped 10 per cent after it raised its profit outlook for the year ending March and hiked dividend payouts. It was the fourth most-traded stock by turnover.
Makino Milling Machine Co surged 5.2 per cent.
Oil shares outperformed as oil prices rose, with both Inpex Corp and Japan Petroleum Exploration advancing 2.0 per cent.
On the other hand, brokerages slipped after reporting weaker-than-expected profits for the July-Sept quarter. Both Nomura Holdings and Daiwa Securities Group tumbled 5.1 per cent.
The broader Topix shed 0.1 per cent to 1,546.47 and the JPX-Nikkei Index 400 was flat at 13,876.71.
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