Japan Nikkei falls ahead of Fed meeting

The Japan share market declined to a 1-1/2-week low on Tuesday, 18 June 2019, as risk sentiments turned downbeat on caution ahead of the outcome of the Federal Reserve's interest rate meeting later in the week. Most of TSE'33 subsectors declined, with electric power and gas, mining and insurance-linked issues were notable losers. At closing bell, the 225-issue Nikkei Stock Average dropped 0.72%, or 151.29 points, to 20,972.71, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 0.72%, or 11.07 points, at 1,528.67.

The US market ended modestly higher on Monday, amid investor caution ahead of a highly anticipated Federal Reserve meeting, which is expected to give further hints about what would be the central bank's first rate cut in more than a decade. On Wall Street, the Dow closed up 0.1% at 26,112.53. The Fed raised rates nine times over the last three and a half years as the economy recovered and put millions of Americans back to work. But President Donald Trump's aggressive tariff policies have shaken confidence and some central bankers have begun to acknowledge a chill in the air.

The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year. Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy.

Meanwhile, on the U.S.-China trade front, hundreds of businesses stateside are attempting to send a message to U.S. President Donald Trump's administration to discourage them from increasing tariffs on China. That comes as U.S. Commerce Secretary Wilbur Ross says Trump is perfectly happy to impose new tariffs on China if the two economic powerhouses don't make a deal.

Exporters were mixed, with Nintendo Co rising 0.7%, Sony Corp shedding 0.2% and Tokyo Electron dropping 1%. Sony was down 0.90% at 5,584 yen while Panasonic was up 1.21% at 868 yen and Toyota was up 0.83% at 6,783 yen. Tateru Inc tumbled 18.6% after reports that the land ministry decided to suspend operations.

Insurers underperformed on expectations for lower rates. Japan Post Insurance declined 1.2% and T&D Holdings skidded 1.1%.

Tsuruha Holdings, a drugstore operator, jumped 4% after it said it expects its net profit to grow 5.1% to 26.1 billion yen for the year ending May 2020.

CURRENCY NEWS: Japanese yen marginally appreciated against greenback on Tuesday. The Japanese yen traded at 108.29 against the dollar after touching levels above 108.6 in the previous session.

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