BOJ Rate Hike Expectations Weigh on Japanese Stocks
Japanese stocks were relatively flat on Tuesday as investors weighed stronger-than-expected domestic economic data against a firmer yen and rising expectations of a Bank of Japan rate hike.
The benchmark Nikkei 225 gained 0.31% to 66,608.42 in early trading, while the broader Topix slipped 0.51% to 4,104.89.
The US market was closed on Monday for a holiday, leaving investors focused on domestic indicators. Revised data showed Japan's gross domestic product expanded faster than initially estimated in the second quarter, with real wages increasing 2.4% in July from a year earlier - their strongest rise since May 2021.
The yen continued to strengthen, reaching its strongest level since February at 153.37 per dollar. Markets now price in a near certainty of a BOJ rate hike to 1.25% next week, which may weigh on exporters due to the currency's appreciation.