Nikkei flat, solid industrial data trims expectations of BOJ easing

  • Reuters
  • Stock Market News
Nikkei flat, solid industrial data trims expectations of BOJ easing
Credit: © Reuters.

* Machinery stocks rise after firm data

* Investors await BOJ policy decision on Fri

* Brokerages underperform on weak July-Sept profits

By Ayai Tomisawa

TOKYO, Oct 29 (Reuters) - Japan's Nikkei share average was nearly flat in choppy trade on Thursday morning after stronger-than-expected industrial output data helped reduce expectations that the Bank of Japan will announce additional easing on Friday.

The market opened on a strong note after Wall Street surged as the U.S. Federal Reserve, downplaying recent global market turmoil, made a direct reference to its next policy meeting that put a December rate hike firmly in play.

While investors took heart from brisk Japanese industrial output data announced before the market open, views that the BOJ will stand pat at its Friday policy meeting grew, traders said.

The Nikkei .N225 moved between positive and negative territory, shedding 0.1 percent to 18,879.78 in mid-morning trade after earlier reaching 19,080.89. It moved closer to a resistance level traders see at its 75-day moving average of 19,103.

"Now that the Fed hints a December hike and Japan's economic data was strong, there are growing views that the BOJ may stand pat tomorrow," said Yoshihiro Okumura, an analyst at Chibagin Asset Management.

He said more investors now think the BOJ may wait to see what the Fed does in December before acting.

Japan's industrial output rose 1.0 percent in September, suggesting the economy is emerging from the doldrums as the pain from China's slowdown begins to ease.

Some machinery stocks outperformed, helped by both the output data and their strong earnings results. Okuma Corp 6103.T jumped 10 percent after it raised its profit outlook for the year ending March and hiked dividend payouts. It was the fourth most-traded stock by turnover.

Makino Milling Machine Co 6135.T surged 5.2 percent.

Oil shares outperformed as oil prices rose, with both Inpex Corp 1605.T and Japan Petroleum Exploration 1662.T advancing 2.0 percent.

On the other hand, brokerages slipped after reporting weaker-than-expected profits for the July-Sept quarter. Both Nomura Holdings 8604.T and Daiwa Securities Group 8601.T tumbled 5.1 percent.

The broader Topix .TOPX shed 0.1 percent to 1,546.47 and the JPX-Nikkei Index 400 .JPXNK400 was flat at 13,876.71. (Editing by Richard Borsuk)

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