March 20, 2019 / 6:39 AM / 7 months ago

Nikkei up slightly before Fed; Sony, Nintendo slide as Google starts gaming business

* Japanese markets closed on Thursday for holiday

* Sony, Nintendo both fall 4 pct

By Ayai Tomisawa

TOKYO, March 20 (Reuters) - Japan’s Nikkei eked out small gains on Wednesday as investors awaited the outcome of a Federal Reserve policy review, while Sony and Nintendo tumbled on news that Google is starting a gaming business.

The Nikkei share average ended 0.2 percent higher at 21,608.92 after trading in negative territory in early trade, but has stayed well above its 25-day moving average of 21,420.48.

Traders said investors remained cautious before the Fed’s policy decision, with many expecting the central bank to reaffirm its dovish stance.

“The market’s consensus is that the Fed will take a patient stance on rates, but you don’t know how the market will react to the outcome while there is a holiday here,” said Hiroyuki Ueno, a senior strategist at Sumitomo Mitsui Trust Asset Management. “The market may be relieved but it’s possible that the market quickly prices in the outcome and profit-taking dents stocks.”

Japanese markets will be closed for a public holiday on Thursday.

The Fed, which is wrapping up its two-day policy review later in the day, is expected to lower its policymakers’ rate projections from December, when their median expectations were for two rate hikes this year.

Sony Corp and Nintendo Co stumbled 3.4 percent and 3.2 percent, respectively, after Alphabet Inc’s Google announced on Tuesday it would launch this year a browser-based video game streaming service dubbed Stadia that attempts to capitalize on the company’s cloud technology and global network of data centres.

“Google is such a big company with lots of resources. If it intends to make a full-scale entry into the gaming industry, it could give a big negative impact to game console makers in the mid-to-long term,” said Makoto Kikuchi, chief executive of Myojo Asset Management.

Chip-related stocks gained, after the Philadelphia SE Semiconductor index rose 1.3 percent to a six-month high. Sumco Corp rose 0.6 percent and Shin-Etsu Chemical added 0.7 percent and Screen Holdings jumped 1.9 percent.

The broader Topix added 0.3 percent to 1,614.39. (Editing by Shri Navaratnam)

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