nikkei average treads water: fomc outcome looms
Tokyo, Wednesday, 19 March 2025.
tokyo’s nikkei average wavered today. investors are holding their breath ahead of the us federal open market committee (fomc) announcement. the bank of japan’s steady interest rate decision barely caused a ripple. while big names like recruit and nintendo saw gains, semiconductor stocks such as advantest and softbank group faced headwinds. will the fomc trigger a wave, or will the nikkei maintain its composure? the market is closed tomorrow for the spring equinox.
nikkei’s midday movement
The Nikkei Stock Average in the Tokyo stock market experienced a reduction in gains in the afternoon session [1]. There were slight declines, and the index fluctuated around its previous closing value of ¥37,845 [1]. The Bank of Japan’s decision to maintain its policy interest rate was anticipated by the market and had little impact [1]. Investors are now focusing on the upcoming announcement from the US Federal Open Market Committee (FOMC) [1]. The market anticipates a cautious mood, especially with the tokyo market closed on march 20 for the spring equinox [1].
tokyo prime market activity
As of 14:00 JST, the estimated turnover in the Tokyo Prime Market reached ¥2,999.5 billion, with 1,274.74 million shares traded [1]. Some stocks showed notable gains, including Recruit, Nintendo, Toyota, and Itochu [1]. Conversely, Advantest, SoftBank Group (SBG), Fujikura, and Disco experienced declines [1]. These movements reflect specific market reactions to company news and broader economic factors [alert! ‘stock fluctuations can be influenced by many factors not mentioned in the source’]. The market’s overall sentiment remains cautious ahead of the FOMC’s decision [1].
u.s. market anticipates fomc
The U.S. stock market also showed signs of caution, with the Dow Jones Industrial Average falling by 260.32 points, a 0.626 0.62% decrease, to close at 41,581.31 [2]. This decline followed a period where the Dow had risen by over 1000 points in the preceding two trading days, leading to profit-taking [2]. Investors are awaiting the FOMC’s results, with expectations that the committee will hold steady on policy interest rates but will also release economic and policy interest rate projections [2]. Jerome Powell’s press conference will be closely monitored [2].
concerns over trump’s trade policies
Uncertainty surrounding potential policies and geopolitical risks continue to weigh on investor sentiment [4]. Concerns persist that the U.S. administration’s tariff policies could lead to higher inflation and slower economic growth [4]. The recent U.S. import price index for February, which rose 0.4% month-on-month, exceeded market expectations of no change, adding to inflationary pressures [4]. Geopolitical risks, such as the renewed large-scale attacks by the Israeli army on Gaza, are also being factored into investment decisions [4].
fomc’s economic outlook in focus
The upcoming FOMC meeting is expected to provide updated economic and inflation forecasts from committee members [3]. The market is keen to understand how the Federal Reserve (FRB) views the economic impact of the current administration’s economic and trade policies [3]. Previous forecasts from December 2024 estimated a 2.1% U.S. economic growth rate for 2025, with a slight increase in the unemployment rate to 4.3% and an inflation rate of 2.5% [3]. However, private economists have since revised their growth outlooks downward and inflation outlooks upward [3].
analyst perspectives on fomc
Tim Ghriskey, Senior Portfolio Strategist at Ingalls & Snyder, noted the high level of uncertainty, particularly regarding the scope and economic impact of tariffs and the extent to which the FRB might ease policy [5]. The market is grappling with confusion and fear in the absence of clear opportunities for corporate growth and increased profits [5]. The anticipation of the FOMC’s decision is creating a risk-off environment, influencing investor strategies and potentially impacting stock valuations across various sectors [5].