February 22, 2024

Asia Markets Mixed While Japan’s Nikkei Records Modest Gains

On Thursday, there was a modest gain recorded in the benchmark index in Japan, as the country’s central bank decided to stick to its ultra-easy monetary policy, as per expectations. As far as the rest of the Asian markets are concerned, they seemed to be quite mixed.

Asian markets mixed

After recording losses earlier, the Japanese Nikkei 225 index was able to reverse its track and ended the day higher by 0.44% at 27,803. Meanwhile, a 0.21% rise was recorded in the Topix index, which saw it close at 1,950.59, after the announcement of the central bank’s decision.

The Australia S&P/ASX 200 recorded 0.52% gains to end the day at 6,794.3. A 2.01% fall in the shares of Rio Tinto was also seen after the company disclosed that it would pay an additional tax of AUD$613 million to the Australian Tax Office. This was because of a dispute and the company has already paid the authority AUD$378 million.

There was a 0.93% gain in the South Korean Kospi index, as it reached 2,409.16 and a 0.56% gain in the Kosdaq index took it to 795.15. Hyundai Motors initially saw its shares rise, but ended the day flat after the automaker’s earnings managed to beat estimates. There was a rise in the revenue in the second quarter to 36 trillion won and a 55.6% increase was recorded in net income to 3 trillion won, as compared to a year ago.

A 1.71% decline was also recorded in the Hang Seng index in Hong Kong in the last hour of trading, as real estate stocks weighed on the index, while there was also a drop in mainland Chinese markets. A 0.99% drop was recorded in the Shanghai Composite index to 3,272 and a 0.94% decline in the Shenzhen Component. A fractional decline was also seen in the MSCI’s Asia-Pacific shares index that does not include Japan.

 BOJ’s Decision

As expected, the Bank of Japan decided to make no changes to its monetary policy, but it raised inflation forecasts and cut down growth forecasts for the year. Market analysts said that this revision in the forecasts shows that the Bank of Japan has no intention of changing its stance anytime soon.

The Japanese yen was being traded at a value of 138.55 against the US dollar after the decision. In recent months, there has been significant weakness in the currency because the easy monetary policy of the country is starkly different from that of the rest.

Central Banks

Most of the world’s central banks, along with those in the region, have hiked up their interest rates in order to keep the surging inflation under control. The European Central Bank is also expected to follow the same path on Thursday.

Market analysts acknowledged that a declining yen was indeed a worrying sign. But, they said that other than the monetary policy, there could be other steps that could also be used for dealing with the currency’s weakness. There can be direct intervention of the Japanese government in the exchange rate market for supporting the yen.

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