"Gains on the Nikkei were capped as investors awaited the outcome of the BOJ's policy meeting," said Yugo Tsuboi, a senior strategist at Daiwa Securities. "But the trend that investors seek to buy undervalued stocks has not changed."
Corporate governance in Japan has suddenly become a hot topic, rousing the stock market out of decades of lethargy, with foreign investors purchasing roughly 1.59 trillion yen worth of Japanese shares last week, their biggest buying in five years. Paul O'Connor, head of multi-asset at Janus Henderson Investors, said 2023 could be a year when investors value resilience of Japanese companies profit growth. "This year, Japanese stocks look set to deliver faster earnings growth than equity markets in the eurozone, UK and the United States." The BOJ is scheduled to hold a two-day meeting next week. Nearly 90% of economists polled by Reuters said the central bank's new chief Kazuo Ueda will not start unwinding its ultra-easy policy at the meeting.
Uniqlo brand owner Fast Retailing Co Ltd was the Nikkei's biggest drag, sliding 1.54%, while technology investor SoftBank Group Corp lost 1.73%. Precision machine maker Disco Corp surged 14% to become the top gainer on the TSE's prime market after posting a record group annual operating profit. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ANALYSIS-Investors seek to break through Japan Inc's 'value trap' Japanese stocks draw biggest weekly foreign inflows since 2018 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Junko Fujita; Editing by Sonia Cheema and Sohini Goswami)
