Nikkei drops tracking Wall Street; market cautious before BOJ
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By Ayai Tomisawa
TOKYO, June 16 (Reuters) - Japan's Nikkei share average dropped on Thursday morning tracking Wall Street after the U.S. Federal Reserve held off raising interest rates, with investors cautious ahead of an outcome from the Bank of Japan's policy meeting.
The Nikkei fell 1.2 percent to 15,723.06 in midmorning trade, hovering more than two-month lows.
The U.S. Federal Reserve kept interest rates unchanged on Wednesday and signalled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years.
Analysts said that market sentiment is dampened by concerns about the U.S. economy, while investors stayed risk averse amid no expectations for policy decision by the BOJ.
"There are few positive events to look forward to right now, so investors are on the sidelines," said Masashi Oda, general manager at strategic investment department at Sumitomo Mitsui Trust Asset Management.
The Bank of Japan is expected to keep monetary policy steady on Thursday even as volatile financial markets, sluggish global growth and anaemic inflation keep policymakers under pressure to do more to reflate the economy out of stagnation. Continuación...