Japanese stocks closed the week in the red as reports pointed to Kevin Warsh emerging as U.S. President Trump's likely choice to lead the US Federal Reserve, dampening risk appetite and weighing on sentiment across equities.
The Nikkei 225 fell 0.1%, or 52.75 points, to close at 53,322.85.
Kevin Warsh, a former Fed governor, is viewed as a relatively cautious choice on monetary stimulus despite favoring lower rates. Trump is pressing for deep rate cuts, raising speculation that the current Fed Chair Powell could stay beyond May to shield the central bank from political pressure.
The Fed, after three rate cuts in 2025, left rates at 3.50%-3.75% Wednesday, while Trump calls for cuts of two to three points-levels typically associated with a weak economy.
In economic news, Tokyo's core inflation eased in January, rising 2% from a year earlier, below forecasts and down from December's 2.3%, while a broader measure excluding food and fuel rose 2.4% versus 2.6% the prior month.
Japan's unemployment held at 2.6% in December, with the labor force shrinking to 70.3 million and participation dipping to 63.9%, while the jobs-to-applicants ratio inched up to 1.19.
Industrial output unexpectedly grew 2.6% in December year-on-year, reversing November's 2.2% decline, driven by machinery, electronics, and motor vehicles, though seasonally adjusted monthly output fell 0.1%. Manufacturers forecast 9.3% growth in January but a 4.3% drop in February.
Retail sales slipped 0.9% in December to 14.825 trillion yen, missing forecasts, with declines in food, beverages, and fuel; commercial and wholesale sales rose 0.3% and 0.9%, respectively.
On the corporate front, Kinden (TYO:1944), which ended nearly 10% lower, posted a 65% jump in nine-month profit to 40.3 billion yen through Dec. 31, 2025, on 7.5% higher sales of 499.3 billion yen, and raised its full-year profit forecast to 65.5 billion yen with a 65 yen year-end dividend.
Hulic (TYO:3003), which rose 3%, saw full-year profit rise 12% to 114.3 billion yen on 23% higher revenue of 727.4 billion yen, lifting EPS to 150.50 yen; the company plans 33.50 yen interim and year-end dividends and expects 121 billion yen profit for 2026.
Hokkaido Electric Power (TYO:9509), which ended 2% higher, is expanding into gas and next-generation energy in Tomakomai, including LNG, hydrogen, ammonia, e-methane, and CCUS projects, aiming to support Hokkaido's energy transition and meet rising demand from semiconductors and data centres.
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