Asia: Markets end week on downbeat note as BoJ leaves policy unchanged

Most Asian equity markets ended the week on a downbeat note, after the Bank of Japan refrained from implementing fresh stimulus measures.

The Bank of Japan lowered its forecasts for economic growth and inflation, due to the slowdown in global growth.

Noting substantial uncertainties, the central bank forecast gross domestic product to expand 1.2% this year compared with a prior estimate of 1.7%.

It pushed back the time frame in which it expects to meet its 2% inflation target, from the middle of 2016 to next year or early 2017.

“Kuroda has faith in modest economic progress having enough momentum to hit targets and thankfully left the door open for further easing,” said Michael Van Dulken, head of research at Accendo Markets.

“The market response suggests markets content with the status quo and especially the option for more QE later as well as the BoJ's confidence in a growth turnaround.

“Not dissimilar to the hawkish Fed statement mid-week seeing the positive outlook on growth outweighing the prospect of higher rates on the horizon. “

Asian markets rose after the decision before relinquishing the gains late in the session.

The Shanghai Composite Index declined 0.14% and Hong Kong’s Hang Seng slid 0.79%, while South Korea’s Kospi and Australia’s S&P/ASX 200 declined 0.23% and 0.52% respectively.

The Nikkei Stock Average, however, bucked the trend and gained 0.78%, closing at its highest level in two months.

Meanwhile, 'core' consumer prices - which exclude food and energy to better reflect underlying trends - in Japan rose 0.9% year-on-year in September, up from the 0.8% gain registered in the previous month.

Elsewhere, according to the Ministry of Land, Infrastructure, Transport and Tourism, housing starts grew 2.6% year-on-year in September, falling short of analysts’ expectations for a 5.8% increase and slumping from an 8.8% climb in August.

The latest increase marked the slowest rate of growth since April.

On the currencies front, the yen gained 0.63% against the dollar in the wake of the BoJ’s announcement, while the offshore Chinese yuan rose 0.49% against the greenback.

The Australian dollar, meanwhile, climbed 0.27% against its US counterpart.