Economic news

Nikkei Dips but Pares Losses after Report on Larger Stimulus

TOKYO, Nov 18 (Reuters) - Japanese shares eased on Thursday, with cyclicals and oil companies leading the decline, but they pared losses after a media report that Prime Minister Fumio Kishida’s stimulus package will be larger than initially expected.

The Nikkei share average ended 0.30% lower at 29,598.66, but it cut a big part of its losses after the Nikkei business daily reported Japan’s economic stimulus package will likely involve fiscal spending of around 55.7 trillion yen ($488 billion) due to huge amounts of cash payouts.

That was way above market expectations of 30-40 trillion yen, though analysts cautioned that many investors would need to see what the government plans to spend on.

“What’s important is the contents. If there are elements that can be interpreted as a part of growth strategy, that would be positive for the stock market. But if not, there will be limited boost,” said Shingo Ide, chief equity strategist at NLI Research Institute.

The broader Topix shed 0.14% to 2,035.52.

The Nikkei reported Kishida’s stimulus package will be formally approved by the cabinet on Friday.

Before the Nikkei report came out, the market had a soft tone after U.S. stocks ended lower overnight, capped by worries the U.S. Federal Reserve may have to raise interest rates more aggressively in the future to tame inflation.

Cyclical shares such as shippers and steelmakers were among the top losers.

The TSE sea transport index lost 4%, with Kawasaki Kisen sinking 7.2% and Nippon Yusen down 4.4%.

Steelmakers declined 1%, with industry leader Nippon Steel losing 1.9%.

Oil-related shares were also bruised as crude prices dropped after a Reuters report that the United States was asking major oil consumers like China and Japan to consider a coordinated release of oil reserves.

Inpex declined 7.1% while Idemitsu Kosan lost 3.6%.

Eisai dropped 9% after a European Medicines Agency panel voted against approval of Alzheimer’s drug the Japanese drugmaker developed with Biogen Inc.

(Reporting by Hideyuki Sano; Editing by Rashmi Aich and Shailesh Kuber)

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree