Tokyo shares closed little changed Thursday as investors weighed news that a US interest rate hike was increasingly likely, while energy stocks tanked after oil prices tumbled from six-month highs. The lacklustre session came after minutes on Wednesday from the Federal Reserve's most recent policy meeting implied the US central bank viewed a June rate hike as a much more serious possibility than traders believed.
The Fed's minutes sent the dollar soaring about one percent against the yen in New York on Wednesday, while also providing an uncertain outlook for riskier emerging market currencies. On Thursday, oil prices slumped in response to the greenback's surge, triggering a regional sell-off in energy stocks. In Tokyo, explorer Inpex tumbled 5.89 percent to 852.7 yen and refiner JX Holdings was off 2.75 percent at 422.8 yen.
"The minutes showed that the policymakers' desires to raise rates in June exceeded the market's expectation for action," Mitsushige Akino, executive officer at Ichiyoshi Asset Management, told Bloomberg News. "Markets aren't likely to rise too much. We're not in a risk-on atmosphere where the yen could keep getting weaker and weaker." The benchmark Nikkei 225 index at the Tokyo Stock Exchange ticked up 0.01 percent, or 1.97 points, to close at 16,646.66, while the broader Topix index of all first-section shares lost 0.14 percent, or 1.82 points, to 1,336.56.
Toyota dropped 0.77 percent to 5,494 yen, while mobile giant SoftBank was 0.28 percent lower at 5,993 yen. However, shares of Suzuki rebounded from a 9.4 percent loss the previous session, gaining 3.53 percent to 2,705.5 yen. The Japanese small-car maker on Wednesday admitted that it was not using fuel-economy and emissions testing methods required by the government, but it denied deliberately manipulating data to make cars seem more efficient. Banking-linked equities also rose, chasing sharp gains among financial firms in US and European markets. Mitsubishi UFJ Financial Group advanced 0.81 percent to 529.8 yen, while rival Sumitomo Mitsui Financial Group edged 0.08 percent higher to 3,449 yen.