Japan's stock market traded lower on Thursday, with the Nikkei 225 Index dropping 180.93 points, or 0.46%, to 39,096.46, as cautious sentiment spread ahead of the Bank of Japan's upcoming monetary policy decision. This downturn reversed gains from the previous three sessions, largely due to negative cues from Wall Street. Market heavyweights, exporters, and tech stocks led the decline, as investors speculated on potential central bank policy adjustments.

Key stocks impacted included SoftBank Group and Uniqlo operator Fast Retailing, both down over 1%. Among automakers, Toyota and Honda saw nearly 1% declines. In the technology sector, Tokyo Electron fell by almost 2%, and Screen Holdings declined by 2.5%, while Advantest surged nearly 6% on the back of raised profit forecasts due to robust demand for AI-related testing equipment.

Export-driven firms also faced challenges, with Canon and Panasonic both down 1.5%, Sony losing nearly 1%, and Mitsubishi Electric slipping 0.5%. Major decliners included M3, dropping over 13%, and Kyocera, down more than 11%, while Nomura Research Institute, Hitachi, and Nidec all faced losses exceeding 6%.Conversely, Mitsubishi Motors rose almost 10%, Tokyo Gas gained over 5%, and Oriental Land added close to 4%.On the economic front, Japan's retail sales grew by just 0.5% in September, missing forecasts of 2.1% and down from 3.1% in August. Quarterly sales increased by 1.1%. Industrial production data offered a bright spot, rising 1.4% monthly in September, above expectations.

The Bank of Japan is expected to maintain its benchmark interest rate at 0.25% following its policy meeting later in the day. Meanwhile, the yen traded at 153 against the US dollar, reflecting market caution.

RTTNews