Tokyo stocks fell Tuesday as investors booked profits before a US Federal Reserve meeting at which policymakers will decide whether to announce a long-awaited interest rate rise. The US central bank is expected to give the go-ahead to a small increase in borrowing costs for the first time in nearly a decade, a decision that has kept markets on edge for months.
The two-day meeting starts later Tuesday, against the backdrop of falls in global stock markets sparked by the recent decline in oil prices to multi-year lows. "Investors are focusing on the Fed," Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told Bloomberg News. "They want to see what the Fed will announce on the target interest rate at the end of 2016.
"There's market consensus that rates will rise this week, but it is unclear what happens after that," he said. The benchmark Nikkei 225 index at the Tokyo Stock Exchange dropped 1.68 percent, or 317.52 points, to close at 18,565.90. The Topix index of all first-section shares was down 1.66 percent, or 25.33 points, to 1,502.55. Among the decliners, Toyota dropped 1.86 percent to 7,324 yen, Nissan fell 3.64 percent to 1,218 yen, and industrial robotics giant Fanuc tumbled 2.01 percent to 20,455 yen.
Energy explorer Inpex was down 1.05 percent to 1,135.5 yen. Toshiba slipped off its morning gains to finish marginally lower at 292.2 yen. Earlier Tuesday, Japan's leading Nikkei business daily reported the company may cut as many as 7,000 jobs in its white goods, television and computer divisions as part of a broad restructuring. Toshiba, which was fined a record $60 million by Japan's market watchdog earlier this month over a profit-padding scandal, said no such plan has been confirmed.