Japan share market finished session slightly lower on Thursday, 23 March 2023, as risk sentiments dampened on tracking negative lead from Wall Street overnight after the US Federal Reserve unveiled another interest rate hike despite worries about the banking sector and U.S. central bank chief's comment suggesting continued monetary tightening.
The 225-issue Nikkei Stock Average index was down 47 points, or 0.17%, to finish at 27,419.61. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 5.61 points, or 0.29%, to 1,957.32.
The Federal Reserve on Wednesday raised interest rates by another 25 basis points to 4.75% to 5%, but indicated it was on the verge of pausing further increases in borrowing costs after the recent collapse of two US banks.
The central bank's latest projections suggest the Fed plans to raise rates just one more time this year to a range of 5% to 5.25%.
The Fed's rate hike was in line with market expectations, but sentiment on the stock market was dampened after Powell said rate cuts are not in our base case, dashing hopes the central bank would pivot to a dovish stance following the collapse of two U.S. banks.
Powell remarks stoked fears of higher borrowing costs and a potential recession in the world's largest economy following the failures of the tech-focused lender Silicon Valley Bank and Signature Bank, a big lender in the crypto space.
Shares of banks and financials closed notable lower. Mizuho Financial Group fell 1.2% to 1,845.5 yen and Mitsubishi UFJ Financial Group dropped 1.8% to 835.8 yen.
Semiconductor shares enjoyed gains after shares of global giant Nvidia advanced. Advantest, which makes tests for semiconductors, rose 1.94% to 12,110 yen, while Tokyo Electron, which builds tools to make chips, added 1.51% to 49,100 yen.
CURRENCY NEWS: The U.S. dollar appreciated to the upper 130-yen range in Tokyo. The dollar fetched 130.66-69 yen compared with 131.45-55 yen in New York and 132.59-61 yen in Tokyo on Wednesday.
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