Nikkei falls as weak oil prices keep market cautious; BOJ awaited

Published 18-12-2015, 07:33 am
Updated 18-12-2015, 07:40 am
© Reuters.

* Nikkei up 0.1 pct for the week

* Market awaits BOJ decision

* Energy shares underperform on weak oil prices

By Ayai Tomisawa

TOKYO, Dec 18 (Reuters) - Japan's Nikkei share average fell on Friday morning on sliding oil prices and as investors awaited more market catalysts after the U.S. Federal Reserve's interest rate hike.

Investors will look to Bank Of Japan's policy decision on Friday with the central bank widely expected to keep its monetary stimulus programme unchanged.

The Nikkei dropped 0.5 percent to 19,256.99 in midmorning trade, moving closer to its 25-day moving average of 19,545.19. The benchmark has gained 0.1 percent for the week.

Analysts said that the market will likely look past the BOJ's decision if it stands pat on policy.

"The market is expected to stay calm (if the BOJ stands pat)," said Chihiro Ohta, general manager of investment research and investor services at SMBC Nikko Securities.

"What may move the market is a negative risk for lower oil prices, but investors are not entirely risk averse for now as the current currency level (dollar) shows risk sentiment is steady."

The U.S. dollar stood at its highest in two weeks against a basket of currencies, having made a decisive move a day after the Fed delivered a long-awaited hike in interest rates. The dollar reached its highest level in over a week at 122.88 JPY= before stepping back to 122.51.

Crude oil futures continued to wallow at multi-year lows against a backdrop of oversupply as well as a stronger dollar following the U.S. Federal Reserve's widely anticipated tightening on Wednesday.

Inpex Corp 1605.T and Japan Petroleum Exploration 1662.T both declined 1.8 percent. Trading houses also weakened, with Mitsubishi Corp 8058.T shedding 1.5 percent and Marubeni Corp 8002.T falling 2.0 percent.

Airline shares outperformed on expectations of lower fuel charges, with ANA Holdings 9202.T rising 0.4 percent and Japan Airlines Co 9201.T gaining 2.1 percent.

Exporters were mixed, with Toyota Motor Corp 7203.T rising 0.3 percent, Honda Motor Co 7267.T dropping 0.5 percent and Panasonic Corp 6752.T falling 0.9 percent.

The broader Topix .TOPX dropped 0.5 percent to 1,557.35 and the JPX-Nikkei Index 400 .JPXNK400 shed 0.5 percent to 14,026.21.

(Editing by Sam Holmes)

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