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On the first trading day of the year, Japan's Nikkei 225 fell the most in two weeks due to concerns that the Federal Reserve will maintain high interest rates, which negatively impacted technology shares. Additionally, a powerful earthquake in the northwest on New Year's Day affected some companies. However, the Topix index saw gains. Tech shares led the decline in the Nikkei 225 index, following the trend of its US counterparts after the Fed meeting minutes did not suggest any immediate easing. Despite this setback, Japan equities had a strong performance in 2023, reaching three-decade highs. The yen's drop supported automakers like Toyota Motor Corp., while shares of companies with operations in the earthquake-affected area declined. Construction companies and shipping firms saw gains due to expectations of increased demand for reconstruction and detours boosting freight costs, respectively. The Nikkei 225's decline on the first trading day is a common occurrence in the past decade, but it does not necessarily predict the market's performance for the rest of the year. The broader Topix index and the MSCI AC Asia Pacific excluding Japan index have shown similar patterns. Overall, the Topix index has risen 26% over the past year, outperforming the MSCI AC Asia Pacific Index. [Extracted from the article]

Japan's largest commercial banks are accumulating trillions of yen in negative interest-rate accounts at the central bank, suggesting that the country's sub-zero rate policy may be nearing its end. When the Bank of Japan introduced negative interest rates eight years ago, it successfully redirected cash to more productive areas of the financial system. However, recent data shows that major banks now have ¥3.2 trillion ($22 billion) in these accounts, the highest amount since the policy was implemented. This increase in funds suggests that banks are anticipating a policy shift from the Bank of Japan. [Extracted from the article]

Japan's biggest bank, Mitsubishi UFJ Financial Group Inc., expects the Bank of Japan (BOJ) to exit negative interest rates in two weeks. The bank's head of global markets business, Hiroyuki Seki, believes that the BOJ will raise rates at its next meeting on March 19, with the goal of reaching a policy rate of 0.25% by October. Seki also anticipates "structural changes" in the Japanese government bond market, including a fall in demand for bonds and a rise in yields, once the BOJ ends negative rates. The BOJ's policy target is likely to be changed to unsecured overnight call rates, and the bank is expected to keep its yield curve control in place to manage volatility. [Extracted from the article]

Japan's consumer inflation rate has accelerated to its fastest pace in four months, raising speculation about whether the Bank of Japan will raise interest rates again later this year. Consumer prices, excluding fresh food, rose 2.8% in February compared to a year ago, matching analysts' estimates. This marks the 23rd consecutive month that consumer inflation has stayed at or above the Bank of Japan's target. The central bank recently ended its stimulus program aimed at boosting inflation but has not indicated when it will make its next move. [Extracted from the article]

Japan's inflation rate has accelerated to its fastest pace in four months, raising speculation about whether the Bank of Japan will raise interest rates again later this year. Consumer prices, excluding fresh food, rose by 2.8% in February compared to the previous year, matching analysts' expectations. However, a gauge of inflation that excludes fresh food and energy prices slowed slightly to 3.2%. The Bank of Japan recently ended its negative interest rate policy due to concerns that waiting too long could lead to rapid inflationary pressure. Despite pockets of weakness in consumer demand, wage trends and smaller declines in energy prices have contributed to the inflationary momentum. [Extracted from the article]

Japan's consumer inflation has reached its fastest pace in four months, raising speculation about whether the Bank of Japan will raise interest rates again later this year. Consumer prices, excluding fresh food, rose by 2.8% in February compared to the previous year, matching analysts' expectations. However, a gauge of inflation that excludes fresh food and energy prices slowed slightly to 3.2%. Despite pockets of weakness in consumer demand, wage trends may contribute to a change in trajectory, as labor unions have agreed to significant wage gains for the coming fiscal year. [Extracted from the article]

Japanese Prime Minister Fumio Kishida is facing a series of challenges at home and abroad. In addition to a political fundraising scandal and record-low public approval, Kishida is now dealing with a devastating earthquake and a deadly plane crash. These events have further weakened his position as prime minister, and there is speculation that his days in office may be numbered. The next few months will be crucial for Kishida, as he faces the passage of the national budget and a potential state visit to the US. The scrutiny on his government is expected to intensify as he handles the aftermath of the earthquake, but it also presents an opportunity for him to demonstrate his leadership. Kishida has pledged to restore the public's trust and stabilize politics. However, he also faces uncertainties on the global stage, including the upcoming US presidential election, Russia's invasion of Ukraine, and the Israel-Hamas war. The fundraising scandal has also affected his policy objectives, such as defense plans and cyber security laws. The Bank of Japan's consideration of ending its negative interest rate policy is another challenge, as the country grapples with economic contraction and the earthquake. Despite these challenges, opposition parties are even less popular than Kishida's ruling party, and no general election needs to be held until 2025. However, it may be difficult for the ruling party to find a successor given the factions' involvement in the funding allegations. The instability in leadership could harm Japan's global status, particularly in its relationship [Extracted from the article]

According to a report by Nomura Holdings Inc., the rally in China's stock market, which is supported by the government, may slow down the flow of global funds into Japanese equities. Japanese large-cap stocks have been benefiting from investors shifting their holdings away from China due to concerns about geopolitics, regulatory uncertainties, and a pessimistic economic outlook. However, if the rally in China is driven more by market measures rather than fundamentals, its positive impact on other markets will be limited. Japanese stocks have seen significant gains in the past year but have stalled recently, and the market faces risks such as potential interest rate increases by the Bank of Japan. [Extracted from the article]

Trial Holdings Inc., a discount-store chain operator, saw a 29% increase in its stock price on its first day of trading in Tokyo after a successful initial public offering (IPO) that raised ¥38.85 billion ($258 million), making it Japan's largest IPO of the year. The stock closed at ¥2,200 on Thursday. The IPO comes as investors show interest in Japanese stocks due to improving shareholder returns and corporate profits, as well as the Bank of Japan's decision to end its negative rates regime. Trial Holdings plans to use the proceeds from the IPO to fund new store openings, renovations, logistics centers, and other operations. [Extracted from the article]

Soldiers, firemen, and emergency personnel in Japan are making a last-ditch effort to rescue survivors trapped in the rubble from a recent earthquake that killed at least 84 people. Over 4,600 personnel have been deployed to assist in the rescue and relief efforts, with the military sending an amphibious vessel carrying heavy machinery to the affected area. Prime Minister Fumio Kishida has emphasized the urgency of finding survivors within the next 72 hours. The earthquake has caused significant damage, including flattened buildings, buckled roads, and a large fire that destroyed around 200 structures. The government is also addressing the long-term issues of housing and restoring the foundations of life and the economy. [Extracted from the article]

Soldiers, firemen, and emergency personnel in Japan are making last-ditch efforts to rescue survivors trapped in the rubble from a devastating earthquake that struck the country's northwest coast on New Year's Day. At least 78 people have been killed, and the military has deployed 4,600 personnel to assist in the rescue and relief efforts. Prime Minister Fumio Kishida has called for an all-out effort to find survivors within the crucial 72-hour window. The earthquake has caused significant damage to buildings and infrastructure, and the estimated loss is around ¥800 billion ($5.6 billion). [Extracted from the article]

Invesco Ltd. is looking to expand its presence in Japan and other foreign markets to take advantage of strong foreign demand for high-yielding US corporate bonds and decreasing hedging costs. The firm's U.S. investment grade team has raised over $30 billion from Japanese buyers in the past decade and continues to attract new clients. In addition to Japan, Invesco sees opportunities in Taiwan and the Middle East for US investment grade fixed income. Factors driving demand include high bond yields, easing recession concerns, potential rate cuts in the US, liquidity in the US market, and diversification in corporate credit. [Extracted from the article]

Astellas Pharma Inc. has announced that Japan's Ministry of Health, Labour and Welfare (MHLW) has approved VYLOY (zolbetuximab), an anti-claudin 18.2 (CLDN18.2) monoclonal antibody, for the treatment of CLDN18.2 positive, unresectable, advanced or recurrent gastric cancer. This approval makes VYLOY the first and only CLDN18.2-targeted therapy approved by any regulatory agency in the world. Gastric cancer is the third deadliest cancer in Japan, with a high incidence rate. The approval is based on positive results from Phase 3 clinical trials, which showed significant improvement in progression-free survival and overall survival for patients treated with VYLOY in combination with chemotherapy compared to those treated with placebo plus chemotherapy. Astellas has also submitted applications for VYLOY to regulatory agencies worldwide. [Extracted from the article]