TOKYO: Tokyo shares gained early Tuesday, ending the morning up 1.33 percent before a monetary policy decision from the Bank of Japan, while investors are also waiting to see if the US will raise rates this week.
The Nikkei 225 index at the Tokyo Stock Exchange rose 239.55 points to 18,205.25 by the break, clawing back a 1.63 percent fall on Monday led by a slump in telecom stocks. The broader Topix index of all-first section shares was up 1.09 percent, or 15.89 points, at 1,478.30.
Investors largely expect Japan’s central bank not to expand its monetary easing this month due to uncertainty about the impact of the US rate decision, despite sagging growth on the world’s third-largest economy.
“Further easing will be needed to maintain credibility in the BoJ’s conduct of policy now that it has boxed itself into a corner, but it will clearly have little positive impact on economic activity or prices,” said Yasunari Ueno, chief economist at Mizuho Securities.
“We continue to forecast that it will occur together with a downward revision of the bank’s forecasts when it publishes the October outlook report,” he added.
Investors have been kept on edge by worries over the growth of China’s economy –the world’s second-largest and a key trade partner for Japan — ahead of the US central bank interest rate decision on September 17.
Although the Fed has signalled it plans to lift interest rates in 2015, some analysts say turbulence in equity markets could prompt the US central bank to push back its time frame.
