Asia report: Markets mixed as Bank of Japan holds policy steady

Markets in Asia finished mixed on Tuesday, with investors busy digesting the outcome of the Bank of Japan’s latest monetary policy decision, in which it stood pat.

In Japan, the Nikkei 225 eked out gains of 0.04% to 22,553.72, as the yen weakened 0.71% against the dollar to last trade at JPY 111.83.

Most sectors on the benchmark index were lower in Tokyo, but decent gains in mining plays and shipping firms offset those losses.

The broader Topix index was down 0.84%.

On the mainland, the Shanghai Composite was up 0.26% at 2,876.40, and the smaller, technology-heavy Shenzhen Composite lost 0.02% to 1,576.41.

The moves in China came after the latest official manufacturing PMI just missed forecasts.

South Korea’s Kospi was ahead 0.08% at 2,295.26, while the Hang Seng Index in Hong Kong was down 0.52% at 28,583.01.

Trading in Seoul bobbed above and below the waterline for much of the session, with sentiment being dragged somewhat by Samsung Electronics, which ended the day down 0.54%.

The technology giant had beaten its own earnings expectations for the second quarter, with operating profit topping KRW 14.9trn.

Samsung’s board had been anticipating a figure of KRW 14.8 trn, while revenue came broadly in line with expectations at KRW 58.5 trn.

Central bank moves were at the top of the agenda for traders on Tuesday, with most having their expectations satiated by the Bank of Japan’s decision to keep monetary policy steady.

It did, however, increase the flexibility of its policy framework for its long-term yield targets, though it did maintain its 10-year government bond target yield at zero percent.

For some, it was a slight disappointment after chatter of hope that the BoJ could adjust its policy to favour sustainability.

Investors were also looking ahead across the Pacific, where the US Federal Reserve was due to begin its monetary policy meeting later on Tuesday.

Its decision on Wednesday is widely anticipated to contain no change to interest rates.

Oil prices were lower, with Brent crude last down 0.73% at $74.43 per barrel, and West Texas Intermediate off 1.42% at $69.15.

In Australia, the S&P/ASX 200 managed to climb 0.03% to 6,280.20, led higher by energy shares.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.01% at 8,922.09, led higher by shipping firm Freightways, which was ahead 1.9%.

The down under dollars were mixed, with the Aussie last 0.38% stronger on the greenback at AUD 1.3450, while the Kiwi weakened 0.17% to NZD 1.4677.