Japanese stocks fluctuated, with the Topix index set to cap its biggest monthly loss in more than three years, before one of the most anticipated central bank policy decisions since Governor Haruhiko Kuroda began easing monetary policy in 2013.
The Topix index slipped 0.2 percent to 1,389.60 at the lunch break in Tokyo, swinging from a 0.7 percent gain. It is headed for a 10 percent monthly decline, the most since May 2012. The Nikkei 225 Stock Average lost 0.5 percent to 16,953.09 as it caps its largest monthly surge in volatility since October 2008. The yen strengthened for the first day in four to 118.58 per dollar as a report showing Japan’s consumer inflation remains barely above zero was released just hours ahead of the Band of Japan’s first policy decision of 2016. Oil rose for a fourth day.
While only six of 42 economists surveyed by Bloomberg are predicting that Kuroda’s board will expand already-record stimulus this time, others didn’t rule that out. Twenty-nine expect further easing by mid-year. Citigroup Inc., JPMorgan Chase & Co. and UBS Group AG economists are among those giving additional stimulus at this meeting a more than 30 percent chance.
Turmoil in global financial markets and the yen’s recent strength have put pressure on the BOJ to consider a policy adjustment to drive price increases and growth in Japan. Data Friday showed the inflation rate remained at 0.1 percent in December, the jobless rate held at 3.3 percent and industrial production fell 1.6 percent from a year earlier. The government reported Thursday that retail sales unexpectedly fell 1.1 percent last month.