Tokyo stocks close flat, Softbank down on merger reports

 31 Oct 2017 - 10:06

Tokyo stocks close flat, Softbank down on merger reports


Tokyo: Tokyo stocks closed flat Tuesday after Japan's central bank cut an annual inflation forecast but kept its ultra-loose monetary policy in place, while SoftBank dropped following reports that a planned telecoms mega-merger had collapsed.

The BoJ slashed its inflation forecast to 0.8 percent for the fiscal year through March 2018 from an earlier 1.1 percent estimate and also slightly trimmed its projection for the following year to 1.4 percent.

But the central bank maintained its 2.0-percent inflation target -- seen as crucial in a long battle against deflation that is blamed for holding back the once-booming economy -- as separate data Tuesday showed household spending and factory output edged down in September.

The benchmark Nikkei 225 index, which opened lower, closed almost unchanged at 22,011.61, while the broader Topix index fell 0.28 percent, or 4.88 points, to 1,765.96.

"Although the outcome of the (BoJ's) policy meeting was widely expected, its decision to leave monetary policy unchanged gave a sense of relief to the market," Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.

SoftBank shares dropped 4.63 percent to 9,947 yen, after reports that merger talks between US wireless operators T-Mobile and Sprint -- the latter controlled by the Japanese telecom giant -- had been scrapped.

SoftBank and T-Mobile parent Deutsche Telekom have failed to agree on the terms of a tie-up, according to the leading business daily Nikkei and other local media.

In forex markets, the dollar weakened slightly to 113.07 yen from 113.17 yen in New York.

Dealers were cautious ahead of the release of key US jobs data, a series of central bank meetings and a long weekend in Japan, analysts said. Japanese markets will be closed on Friday for a public holiday.

The stronger yen weighed on some exporters, with Toyota losing 1.22 percent to end the day at 6,990 yen while Honda fell 0.53 percent to 3,523 yen.

Fujitsu rose 1.73 percent to 878.4 yen after a report said it will likely agree with China's Lenovo on terms for the integration of their personal computer businesses.

Panasonic fell 0.52 percent to 1,700.5 yen while Sony jumped 2.38 percent to 4,413 yen. The electronics giants are publishing their half-year earnings reports after markets close.