Japan's Nikkei slips on firmer yen amid BOJ rate hike bets; logs worst month since April

(Updates for market close)

By Brigid Riley

TOKYO, Nov 29 (Reuters) - Japan's Nikkei share average fell on Friday as the yen strengthened on growing expectations of an interest rate hike by the Bank of Japan (BOJ) after hotter-than-expected inflation data.

The Nikkei closed 0.4% lower at 38,208.03. It was down 0.2% on the week, marking its third consecutive week of losses.

The broader Topix finished down 0.2% at 2,680.71.

The U.S. dollar/yen pair broke below 150 for the first time in over a month on growing bets that the BOJ will hike rates again next month.

Investors now see a 60% chance the BOJ would hike rates in December.

This weighed on exporter shares, with automaker Toyota Motor (TM) and tech and entertainment conglomerate Sony Group (SONY) sliding 2.1% and 1.7%, respectively.

Nissan Motor (NSANF) was the biggest percentage loser on the Nikkei, down 4%.

Meanwhile, banks and insurance stocks were boosted by prospects of the rate hike, sending Dai-ichi Life Holdings (DCNSF) soaring 3.5% and Chiba Bank (CHBAF) rallying 4.2% to land among the Nikkei's top percentage gainers.

The benchmark posted a 2.2% decline in November, its worst monthly performance since April, as the market struggled amid geopolitical uncertainties and the U.S. presidential election.

Investors have been weighing concerns around U.S. President-elect Donald Trump's tariff pledges.

In the coming months, "markets will likely need to become accustomed to higher (yen) interest rates and U.S. trade tariffs," said Neil Newman, head of strategy at Astris Advisory.

The median forecast in a Reuters poll for the Nikkei saw tepid growth by mid-2025 as the market navigates near-term uncertainties, before scaling new highs.

The Nikkei will likely continue trading in a range next week, with more potential comments from Trump among items in focus next week, said Kazuo Kamitani, an equities strategist at Nomura Securities.

Among other major shares, chip-making equipment maker Tokyo Electron (TOELF) dipped 1.8%, while AI-focused startup investor SoftBank Group lost 1.2%.

Soy sauce maker Kikkoman (KIKOF) shed 3.1%. (Reporting by Brigid Riley; Editing by Varun H K and Sumana Nandy)