TOKYO (Kyodo) — Tokyo stocks ended lower Friday after hitting intraday all-time highs, as selling was spurred by the Bank of Japan’s decision at its policy meeting to start selling exchange-traded funds it had purchased for monetary easing.
The 225-issue Nikkei Stock Average dropped 257.62 points, or 0.57 percent, from Thursday to 45,045.81. The broader Topix index finished 11.19 points, or 0.35 percent, lower at 3,147.68.
On the top-tier Prime Market, the main decliners were service, precision instrument and retail issues.
The U.S. dollar briefly weakened to the lower 147 yen range in Tokyo. The yen was bought on anticipation that the Japanese central bank may raise its benchmark interest rate soon, after two BOJ board members voted against leaving it unchanged and proposed a rate hike at the policy meeting, dealers said.
Stocks climbed following overnight record highs on Wall Street, driven by optimism about the U.S. economy after the Federal Reserve decided earlier this week to cut its rate and signaled the possibility of further rate cuts within this year.
Heavyweight semiconductor and technology shares were notably bought in the morning following a rise in the tech-heavy U.S. Nasdaq index after chip giant Nvidia Corp. said Thursday it will invest $5 billion in struggling chipmaker Intel Corp. and jointly develop chips for computers and data centers.
Tokyo stocks later lost steam and slipped into negative territory, with the Nikkei index briefly losing over 800 points.
The BOJ’s decision fueled speculation that the market will be weighed down by eased demand triggered by the BOJ’s selling of its own shares and the subsequent increase in the number of shares in the Tokyo market, according to dealers.
“The (BOJ’s) announcement came as a complete surprise, prompting investors to sell,” said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
But Yamaguchi said the impact of the BOJ’s move to sell ETFs at an annual pace of about 620 billion yen will “not be that significant and unlikely to reverse the recent upward trend,” with some investors taking the chance to lock in gains while the Nikkei is at the 45,000 mark.
Some exporter shares also drew selling on the yen’s appreciation, which decreases exporters’ overseas profits when repatriated.