TOKYO, Dec 31 (NNN-NHK) – Japan’s benchmark Nikkei stocks index ended essentially flat yesterday, after erasing early gains on concerns something negative might happen in the U.S. and affect global markets during the holidays against a backdrop of global recession worries.
The Nikkei index marked its first decline since 2018, slumping 9.4 percent for the year.
The broader Topix index, meanwhile, lost 3.56 points, or 0.19 percent, to finish at 1,891.71.
The Topix index saw its first yearly fall in four years. It lost an annual five percent by the end of the year, also marking its first decline in four years.
Local brokers here said, investors were in a circumspect mood, as, while moves by global central banks, no more so than the U.S. Federal Reserve, to continue with plans to aggressively hike their interest rates to combat inflation, despite the downside effects this will have on global growth, such moves had largely been factored in, although the future course of the market remains unknown.
“Monetary policy in the U.S. had a big impact on the fluctuation of Japanese share prices this year,” Masahiro Yamaguchi, head of investment research at SMBC Trust Bank, said.
“Higher U.S. interest rates also made stocks relatively less attractive, compared with other financial products, and that was also a negative for stocks,” Yamaguchi added.
Other analysts said that, efforts to tame inflation would hurt Japanese stocks as well as keep the Japanese yen pegged at a low valuation versus the U.S. dollar.
Among downside pressures from recessionary concerns and the yen’s persistent weakness, investment strategists said, the consensus belief is that the Nikkei index’s range next year will be between 25,000 and 30,000.
Brokers added that, based on the roller-coaster the market had been on this year, in the time away from trading, investors were concerned worldwide events could occur, citing the U.S. in particular, which would have a global knock-on effect for markets next year.
“Investors are worried there may be something happening in the U.S. during the holiday. There are many uncertainties in overseas markets,” Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities, was quoted as saying.
By the close of play yesterday, issues that gained the most, comprised marine transportation, bank and retail-linked issues.
The broader market got a lift from Nikkei heavyweights finding favour, following the tech-heavy Nasdaq’s solid showing overnight, with technology startup investor SoftBank Group adding 0.4 percent, while Uniqlo clothing chain operator gained 1.9 percent by the close.
Among other domestic technology-oriented shares finding favour, following the Nasdaq’s overnight advance, electric appliance maker Omron gained 1.7 percent, while TDK ended 0.9 percent higher.
Shipping firms also found favour, with Kawasaki Kisen rising 2.6 percent, while Nippon Yusen gained 0.8 percent.
Issues that rose, outpaced those that fell, by 895 by 843, while 100 ended the day unchanged.
On the Prime Market yesterday, 881.80 million shares changed hands, dropping from Thursday’s volume of 1,021.78 million shares.
The turnover on the final trading day of the year came to 2,139,96 billion yen (16.23 billion U.S. dollars).
