Japan’s Nikkei ends flat as investors eye more U.S. data

Japan’s benchmark Nikkei stock index closed essentially flat on Friday as investors adopted a wait-and-see approach for further clues as to the future course of the U.S. Federal Reserve’s aggressive rate hikes.

The 225-issue Nikkei Stock Average edged up 19.81 points, or 0.07 percent, from Thursday to close the day at 27,382.56.

The broader Topix index, meanwhile, added 4.26 points, or 0.22 percent, to finish at 1,982.66.

Dealers here said that sentiment was initially buoyed by gains made on Wall Street overnight following data showing larger-than-expected U.S. gross domestic product expansion in the fourth quarter.

The U.S. growth data led to investors believing the Fed might be able to halt its rate hikes at an earlier junction, although some caution remained over upcoming economic data, market analysts here said.

They said ahead of the Fed’s next meeting at the end of this month, investors are now eyeing U.S. personal consumption expenditure data due out later in the day.

The data is known to be a key economic indicator closely watched by the Fed. “Investors were anxious to know if there will be any clue on whether the bank will pause its rate hikes,” Koichi Fujishiro, senior economist at the Dai-ichi Life Research Institute, was quoted as saying.

Data released here showing that core consumer prices in Tokyo climbed 4.3 percent in January, nearing a 42-year high, weighed on sentiment, analysts also highlighted, as the data set is regarded as a barometer of the future direction of inflation for the country as a whole.

Strategists here said that rising inflation could mean the Bank of Japan could exit from its ultra-loose monetary policy.

By the close of play, bank, chemical, and electric power and gas issues comprised those that gained the most.

Among notable decliners were marine transportation, precision instrument and pharmaceutical issues.

Chemical-oriented issues finding favor included wafer maker Shin-Etsu Chemical, which climbed 4.1 percent, after saying its net profit rose more than 60 percent in the nine-month period through December and raising its full-year profit forecast.

Banking shares gained ground on expectations Tokyo’s CPI (Consumer Price Index) data could lead to the Bank of Japan tightening its monetary policy, with Mitsubishi UFJ Financial Group ending 2.7 percent higher.

The turnover on the final trading day of the week came to 2,698 billion yen (20.77 billion U.S. dollars).