TOKYO: Tokyo stocks ended 1.45 percent lower on Tuesday after the Bank of Japan (BoJ) delayed expanding April's huge stimulus scheme after a two-day meeting.
The benchmark Nikkei 225 index, which soared 4.94 percent Monday, closed down 196.58 points at 13,317.62, while the Topix index of all first-section shares was down 0.97 percent, or 10.82 points, at 1,101.15.
The Nikkei index lost more than 1.6 percent at one point shortly after the central bank said it would hold off unveiling any fresh stimulus.
In April, the BoJ announced it would unleash a torrent of easy money to fuel growth, its boldest bid yet to reverse years of deflation.
Market players had been hoping for measures to calm volatility in markets, dealers said, after a tumultuous two weeks that have seen wild swings on the Tokyo Stock Exchange.
"The BoJ decision is likely to disappoint the market and fuel yen-buying sentiment," said Takahiro Sekido, economist with the Bank of Tokyo-Mitsubishi UFJ. However, he added that "there is room for fresh measures at the next meeting".
Some had expected the BoJ would extend a timeframe for cheap loans to banks, encouraging them to buy more Japanese government bonds which have been volatile in recent weeks amid fears over Tokyo's ability to finance its huge debt, the worst in the industrialised world at twice the size of the economy.
On forex markets, the dollar weakened to 98.25 yen in Tokyo afternoon trade, falling below 98 yen at one stage following the BoJ announcement, compared with 98.87 yen late Monday in New York.
Shares in SoftBank slipped 0.36 percent to 5,500 yen after it raised its bid for Sprint Nextel by about $1.5 billion to $21.6 billion to fend off a rival bid.
Shares of Japan Airlines fell 1.91 percent to 5,130 yen after it said a Singapore-bound Dreamliner flight had to be aborted after developing a glitch with its anti-icing system.
The plane turned around and landed safely.
Shares of JAL's rival All Nippon Airways fell 1.96 percent to 200 yen after reports that Malaysian budget carrier AirAsia said it was considering ending a low-cost carrier joint venture with the Japanese firm. (AFP)
