Market Insider

BOJ rate decision, JGB purchases

The Bank of Japan (BOJ) headquarters is seen beyond the cherry blossoms in Tokyo on March 20, 2023.

Kazuhiro Nogi | Afp | Getty Images

Asia-Pacific markets were mixed after the Bank of Japan kept its benchmark interest rate unchanged on Friday, but indicated it’s considering the reduction of its purchase of Japanese government bonds.

The central bank left short-term rates unchanged at between 0% to 0.1% as widely expected, but said it could reduce its purchases of Japanese government bonds after the next monetary policy meeting, scheduled for July 30 and 31.

The BOJ currently aims to purchase about 6 trillion yen ($38.5 billion) in bonds per month, and has informed the market of plans to purchase between 4.8 trillion yen and 7 trillion yen of bonds per month.

Japan’s Nikkei 225 reversed losses after the BOJ decision to close 0.24% higher at 38,814.56, while the Topix was 0.54% higher at 2,746.61.

Following the BOJ decision, the Japanese yen weakened 0.64% to 158.03 against the U.S. dollar, while the yield on 10-year JGB rose marginally to 0.943% recovering from declines earlier in the session.

South Korea’s Kospi ended 0.13% higher, reaching its highest point in about three months at 2,758.42, but the small cap Kosdaq fell 1.05% to close at 862.19.

Australia’s S&P/ASX 200 fell 0.33% to close at 7,724.3.

Hong Kong Hang Seng index was down 0.48%, while the CSI 300 in mainland China gained 0.44% to rebound from a near two-month low and finish at 3,541.53.

Overnight in the U.S., the S&P 500 rose to post a fourth consecutive record close as traders weighed more data showing inflation pressures may be easing.

The broad market index climbed 0.23% to end at 5,433.74, while the Nasdaq Composite advanced 0.34% and closed at 17,667.56. Thursday marked the fourth straight closing record for both S&P 500 and the Nasdaq.

The Dow Jones Industrial Average was the underperformer, slipping 0.17%.

The S&P 500 and Nasdaq hit record levels this week, boosted by fresh data showing signs of inflation pressures cooling.

—CNBC’s Lisa Kailai Han and Sarah Min contributed to this report.

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