Nikkei 225 remains flat ahead of central bank policy decisions

The Nikkei 225 remained largely flat as investors maintained a cautious stance ahead of upcoming policy decisions from the U.S. Federal Reserve and the Bank of Japan. While the Nikkei saw a slight decline, the Tokyo Stock Price Index (TOPIX) showed resilience, rising 0.79% during intraday trading.

Market sentiment has been influenced by rising U.S. Treasury yields, debt concerns, and surging crude oil prices. Recent trade data revealed a significant trade deficit in Japan of 1.106 trillion yen, driven by a 28% increase in imports against a 19.3% increase in exports, highlighting the impact of rising energy costs.

In response to high oil prices and rising long-term interest rates, there has been a notable shift in sector performance. Resource and energy-related stocks, such as Idemitsu Kosan and ENEOS Holdings, have seen significant gains. Conversely, sectors like electrical equipment and real estate have faced headwinds. Analysts suggest that while the broader Nikkei has faced downward pressure, capital has flowed into value stocks, small-cap stocks, and domestic-oriented sectors.