Japan's Nikkei ends lower as yen strengthens on BOJ chief's comments

Japan's Nikkei share average reversed course to end lower on Thursday, pressured by exporters, as the yen strengthened after comments from Bank of Japan chief bolstered rate hike expectations.

The Nikkei closed 0.08% lower at 36,790.03, after rising as much as 1.4% earlier in the session to track Wall Street's overnight higher.

The broader Topix narrowed its gains, ending up 0.13% at 2,698.36.


BOJ Governor Kazuo Ueda said on Thursday he expects consumption to improve, as the rise in import costs moderates and wage growth strengthens.

The comments drove bets for the BOJ's early interest rate hike, pushing the Japanese government bond yields and the yen higher.

Wages are seen as key for the BOJ's policy path. Many of Japan's biggest companies have met union demands for substantial wage hikes for a third consecutive year, seeking to help workers cope with inflation and retain staff amid labour shortages.

"There was not much new in what Ueda said today but the market was sensitive to his comments at a time when the BOJ is trying to raise rates and other nations are cutting rates," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

A stronger Japanese currency tends to hurt shares of exporters, as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.

Automakers extended early losses, with Toyota Motor losing 1.54% and Honda Motor down 1.21%. Nissan Motor slipped 3.92%.

The auto sector fell 1.22% to become the worst performer among the Tokyo Stock Exchange's 33 industry sub-indexes.

Chip-testing equipment maker Advantest narrowed gains to end 3.67% higher. Chip-making equipment manufacturer Tokyo Electron cut its gains to end 0.07% lower.

Of the 225 Nikkei companies, 111 stocks rose and 112 fell, with two trading flat.