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Nikkei edges higher before Fed meeting; Toshiba jumps

Published 06/12/2018, 10:47 PM
Updated 06/12/2018, 10:50 PM
© Reuters. People walk past an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo
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By Ayai Tomisawa

TOKYO (Reuters) - Japan's Nikkei share average edged higher on Wednesday as the market looked to the Federal Reserve's monetary policy decision later in the global day, while Toshiba jumped after it announced a major share buyback.

Toshiba Corp (T:6502) surged more than 7 percent after it said it would buy back up to about 700 billion yen ($6.33 billion) of its own shares.

The Nikkei rose 0.4 percent to 22,967.65 by midmorning.

Investors quickly turned their attention from Tuesday's historic U.S.-North Korea summit to the Federal Reserve's policy meeting that ends on Wednesday.

U.S. President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearization of the Korean peninsula, but their joint statement gave few details on how the goal would be achieved.

"The outcome was in line with what the market had expected. Few people expected that there would be details on denuclearization from this summit," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

He said that while the Fed is widely expected to raise interest rates for the second time this year at the policy meeting, the market is watching how U.S. yields move after the announcement.

"Investors are looking out for hints on whether the Fed wants to raise rates further this year. If that's the case, U.S. stocks will likely weaken, which would pressure Japanese stocks," Sato said.

Exporters were mixed, with automakers attracting buying, while technology stocks were sold. Toyota Motor Corp (T:7203) rose 1.4 percent, but Advantest Corp (T:6857) shed 1.6 percent and Panasonic Corp (T:6752) dropped 0.9 percent.

Nintendo Co (T:7974) tumbled more than 7 percent, with traders citing that the company disappointed investors after its presentation held at E3 2018. Traders said that new game titles for Nintendo Switch consoles that were announced at the game event did not include major titles.

The broader Topix (TOPX) gained 0.3 percent to 1,797.64.

© Reuters. People walk past an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo

($1 = 110.5900 yen)

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