Japan Stocks shine after dovish Fed decision

Japan share market finished session higher on Thursday, 18 March 2021, as sentiment was lifted by the US Federal Reserve's pledge to continue its easy-money policies and keep its key interest rate near zero through 2023.

At closing bell, the 225-issue Nikkei Stock Average advanced 302.42 points, or 1.01%, to 30,216.75. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added 24.48 points, or 1.23%, to 2,008.51.

Total 29 out of 33 industry category of Topix index ended into positive territory, with Banks, Securities & Commodities Futures, Rubber Products, Transportation Equipment, Insurance, and Glass & Ceramics Products issues being notable gainers, whereas Land Transportation and Real Estate issues were notable losers.

The US central bank showed an optimistic view about the outlook for the American economy, but Federal Reserve Chair Jerome Powell cautioned a full recovery remains far off. The US Federal Reserve continues to provide dovish guidance and is keeping its policy Fed fund rate close to 0% through 2023. It will maintain the pace of its pace of quantitative easing programme via its US$120bn monthly purchase of bonds, despite an economic growth outlook upgrade on its latest dot plot that projected US 2021 GDP growth to be at 6.5% (the strongest since 1983) from a prior projection of 4.2% in the December 2020 FOMC meeting. In addition, the US labour market is expected to improve, with the median estimate for unemployment to decline to 4.5% towards the end of 2021, dipping further to 3.5% in 2023. The Fed downplayed the risk of inflationary pressures, and only expect a bump in inflation to 2.4% in 2021 before slowing to 2% in 2022, excluding food and energy.

Next up will be the Bank of Japan's (BoJ) monetary policy meeting outcome on Friday, and this meeting is important as the BoJ will also release its latest review on its monetary policy toolkit, which consists of a massive amount of exchange traded fund purchases and a yield curve control programme.

Panasonic rose over 1% after the firm said it will sell two European plants that produce disposable consumer batteries to German asset management group Aurelius.

Toshiba advanced 1.5% after a landmark vote to investigate the fairness of voting at the 2020 annual shareholders' meeting.

Z Holdings gave up 1.6% after reports that its group online chat firm Line let Chinese engineers access to customer data.

CURRENCY NEWS: The dollar fetched 108.93 yen in Asian trade, against 108.82 yen in New York late Wednesday.

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