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Japan’s Nikkei rises modestly after Bank of Japan keeps rates on hold; Asia markets mixed

Soegeefx AppsAsia MarketJapan’s Nikkei rises modestly after Bank of Japan keeps rates on hold; Asia markets mixed

Key Points

  • Japan’s Nikkei 225 index rose modestly on Thursday after the Bank of Japan kept rates on hold, while Asia markets were mixed.
  • The Bank of Japan stuck to its ultra-easy monetary policy as expected.
  • In company news, Hyundai Motor will be reporting its second-quarter results Thursday.

SINGAPORE — Japan’s benchmark index rose modestly on Thursday after the Bank of Japan kept rates on hold, while Asia markets were mixed.

The Nikkei 225 in Japan reversed earlier losses to rise 0.15% while the Topix index was fractionally lower after the central bank’s decision was announced.

The revision down in the Bank of Japan’s growth projection suggests that the Bank of Japan is going to stay put for much, much longer.

Jesper Koll

Director, Monex Group Japan

In Australia, the S&P/ASX 200 was about flat.

Rio Tinto shares fell 3.38% after the company said it will pay the Australian Taxation Office an additional tax of 613 million Australian dollars ($422 million) over a dispute. Rio previously paid the ATO 378 million Australian dollars.

South Korea’s Kospi gained 0.5% and the Kosdaq was 0.44% higher.

Hong Kong’s Hang Seng index slipped 1.37% with real estate and financial stocks pulling the index lower, while mainland China markets dropped.

The Shanghai Composite fell 0.42% and Shenzhen Component declined 0.17%.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.33%.

Bank of Japan decision

The Bank of Japan stuck to its ultra-easy monetary policy as expected, while lowering its growth forecast for 2022 and raising its inflation predictions.

“The Bank of Japan stays a bastion of stability here,” Jesper Koll, director at Monex Group Japan, said.

“In fact, the revision down in the Bank of Japan’s growth projection suggests that the Bank of Japan is going to stay put for much, much longer,” he told CNBC’s “Street Signs Asia” on Thursday.

Japan’s yen changed hands at 138.27 per dollar following the decision.

The currency has weakened considerably in recent months as Japan’s easy monetary policy diverges from that of other countries.

Central banks in the region and the rest of the world have raised interest rates in a bid to keep inflation under control. The European Central Bank is expected to hike rates later Thursday.

Takuji Okubo, managing director of Japan Macro Advisors, acknowledged that there are concerns over the falling value of the yen.

However, I think there are other ways, other policies — other than Bank of Japan’s monetary policy — [that] can help ease the pain from the weak yen,” he told CNBC’s “Squawk Box Asia” before the decision. ”[The] Japanese government can intervene directly in the exchange rate market to help support the yen.”

Japan’s latest consumer price index report showed that prices rose 2.1% from a year before, just above the central bank’s target.

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In company news, Hyundai Motor will be reporting its second-quarter results Thursday.

Overnight in the U.S., major averages reached their highest points since early June.

The Nasdaq Composite popped 1.58% to 11,897.65, and the S&P 500 gained 0.59% to 3,959.90. Meanwhile, the Dow Jones Industrial Average advanced 47.79 points, or 0.15%, to 31,874.84 after struggling for direction in the session.

TICKER COMPANY NAME PRICE CHANGE %CHANGE
.N225 Nikkei 225 Index *NIKKEI 27742.22 61.96 0.22
.HSI Hang Seng Index *HSI 20606.47 -283.75 -1.36
.AXJO S&P/ASX 200 *ASX 200 6755.5 -3.7 -0.05
.SSEC Shanghai *SHANGHAI 3290.8 -13.93 -0.42
.KS11 KOSPI Index *KOSPI 2396.92 10.07 0.42
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 8063.04 -45.17 -0.56

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 106.849, weaker than last week’s levels.

The Australian dollar was at $0.6892, slightly lower than earlier in the week.

Oil futures fell in Asia trade. U.S. crude slipped 0.77% to $99.11 per barrel, while Brent crude dropped 0.61% to $106.27 per barrel.

Source : CNBC

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