Nikkei to tread water as all eyes on BOJ meeting

Mon Jan 21, 2013 11:27pm GMT

TOKYO, Jan 22 (Reuters) - The Nikkei share average is likely
to trade in a narrow range before the end of a Bank of Japan
policy meeting on Tuesday at which the central bank is largely
expected to set a 2 percent inflation target and introduce more
aggressive easing steps.
    Market players said the Nikkei was likely to trade
between 10,650 yen and 10,850 yen on Tuesday, with most of the
movement coming after the BOJ's announcement due around midday.
    "Everyone expects the 2 percent inflation target but that
won't suffice," said Hisao Matsuura, an equity strategist at
Nomura Securities. "I think the market will drop no matter what
they say, but expectations are very mixed. It really depends
what (the BOJ) decides to do."
    The central bank's current inflation target is 1 percent.   
    The BOJ might also scrap the interest it pays on banks'
reserves, according to sources, as well as boost its asset
purchases budget to as much as 20 trillion yen ($223 billion),
in response to relentless pressure from Prime Minister Shinzo
Abe to haul Japan out of deflation. 
    The Nikkei has sprinted up around 26 percent in the last two
months since Abe first began calling for aggressive easing from
the BOJ, even before he came into office, which sparked weakness
in the yen and drove up shares of exporters.
    The benchmark slipped 1.5 percent on Monday to 10,747.74 as
investors locked in profits after the index hit a 32-month high
last week and logged its 10th straight week of gains, its
longest such winning streak since 1987.
    U.S. markets were closed on Monday for Martin Luther King
day. 
 
> Europe shares flirt with 2-yr highs in light trade      
> Yen firm as bets on losses trimmed before BOJ decision  
> Bond prices climb as buyers emerge after sell-off       
> Gold firms as U.S. budget talks lift European stocks    
> Oil edges lower on oversupply concern                   
    STOCKS TO WATCH
    -SONY CORP 
    Sony's Sony Mobile Communications Inc division said it will
sell a new version of its Xperia tablet in Japan this spring,
according to the Nikkei business daily. Sony halted sales of the
Xperia in October due to faults that made it vulnerable to water
damage. 
    -TOSHIBA CORP 
    Toshiba is considering bidding for nuclear fuel producer
Urenco, competing with France's Areva, as Britain and
German utilities are keen to sell their respective 33 percent
stakes, but Dutch authorities disagree over what to do with the
firm, according to sources. 
    -NIPPON PAINT CO LTD 
   Hong Kong paint maker Wuthelam Group plans to launch an open
bid for a controlling 45 percent stake in Japan's Nippon Paint
Co for about 70 billion yen ($780 million) to expand
market share overseas, public broadcaster NHK said on Monday. 
    -ORIENTAL LAND 
    The operator of Tokyo Disneyland is likely to post a 30
percent year-on-year increase in operating profit to 72 billion
yen ($802 million) for the April-December period, the Nikkei
business daily said, due to more seasonal events than usual at
the theme park resort.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.