Japan Bourse May See Mild Downside Correction

(RTTNews) - The Japan stock market rebounded on Wednesday, one day after ending the two-day winning streak in which it had rallied more than 1,800 points or 3 percent. The Nikkei 225 now rests just above the 51,300-point plateau although it may run out of steam on Thursday.

The global forecast for the Asian markets is murky on easing optimism over the outlook for interest rates. The European and U.S. markets were mixed and the Asian bourses are likely to follow suit.

The Nikkei finished sharply higher on Wednesday following gains from the financial shares and technology stocks, although the automobile producers were soft. For the day, the index skyrocketed 1,088.47 points or 2.17 percent to finish at 51,307.65 after trading between 50,365.62 and 51,412.97. Among the actives, Nissan Motor tumbled 1.92 percent, while Mazda Motor retreated 1.49 percent, Toyota Motor sank 0.79 percent, Honda Motor dropped 0.81 percent, Softbank Group rallied 3.90 percent, Mitsubishi UFJ Financial collected 0.31 percent, Mizuho Financial rose 0.36 percent, Sumitomo Mitsui Financial slumped 0.83 percent, Mitsubishi Electric jumped 1.81 percent, Sony Group declined 1.37 percent, Panasonic Holdings spiked 2.66 percent and Hitachi soared 3.68 percent.

The lead from Wall Street offers little clarity as the major averages opened higher and stayed that way for much of the day before slumping late in the session to finish mixed and little changed.

The Dow slipped 74.37 points or 0.16 percent to finish at 47,632.00, while the NASDAQ climbed 130.98 points or 0.55 percent to finish at a record 23,958.47 and the S&P 500 dipped 0.30 points or 0.00 percent to end at 6,890.59.

Early support came from the tech shares after Nvidia (NVDA) became the first company with a $5 trillion market capitalization.

The late-day weakness followed Federal Reserve Chair Jerome Powell's comments after the central bank's monetary policy announcement. While the Fed lowered interest rates by another quarter point as expected, Powell's post-meeting remarks offset optimism for another rate cut in December.

Powell said a further reduction in rates in December is "not a foregone conclusion," noting Fed officials had "strongly differing views about how to proceed" at the final meeting of the year.

Highlighting the high level of uncertainty due to government shutdown delaying key data, Powell also said there's a "growing chorus" that feels the Fed should "wait a cycle" to continue cutting rates.

Crude oil prices bounced higher on Wednesday after a report from the Energy Information Administration showed a steep drop by U.S. crude oil inventories last week. West Texas Intermediate crude for December delivery was up $0.31 or 0.5 percent at $60.46 per barrel.

Closer to home, the Bank of Japan will wrap up its monetary policy meeting this morning and then announce its decision on interest rates; the BoJ is expected to keep its benchmark lending rate steady at 0.50 percent.