Asia report: Markets finish higher as BoJ stands pat on policy

Markets in Asia finished mostly higher on Tuesday, as investors held their breath ahead of further trade talks between the US and China taking place in Shanghai this week.

In Japan, the Nikkei 225 was up 0.43% at 21,709.31, as the yen strengthened 0.2% against the dollar to last trade at JPY 108.56.

Of the major components on the benchmark index, automation specialist Fanuc ended the day up 3.14% and fashion firm Fast Retailing was 0.16% higher, while technology conglomerate SoftBank Group lost 3.48%.

The broader Topix index advanced 0.45% in Tokyo to end its trading day at 1,575.58.

During the day, the Bank of Japan sated trader expectations by standing pat on monetary policy, though it did suggest that it would “not hesitate to take additional easing measures” if the economy started lagging on its way towards the 2% target inflation rate.

The central bank added that it was intending to maintain its current very low levels of short-term and long-term interest rates for an extended period, until at least spring next year.

Also in economic news from Japan, the country’s factory output slid more than anticipated in June.

“Yen gained in the immediate aftermath of the BoJ statement, as investors in Japan demanded more support amid disappointing earnings season for Japanese exporters, slowing global demand, topped with rising trade tensions with South Korea,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“Moving forward, the BoJ will increasingly come under the pressure of the doves.”

On the mainland, the Shanghai Composite added 0.39% to 2,952.34, and the smaller, technology-heavy Shenzhen Composite was up 0.45% at 1,582.07.

South Korea’s Kospi was 0.45% firmer at 2,038.68, while the Hang Seng Index in Hong Kong managed gains of 0.14% to 28,146.50.

Gains in the special administrative region came after Beijing reiterated its support for the city’s chief executive Carrie Lam, amid ongoing protests over a mainland-supported extradition bill.

Officials in the People’s Republic also hinted that the way it manages Hong Kong would not be changing as a result of unrest in the city.

The blue-chip technology stocks were both higher in Seoul, with Samsung Electronics up 0.98%, and chipmaker SK Hynix rising 2.47%.

Oil prices were higher as the region went to bed, with Brent crude last up 0.67% at $64.14 per barrel, and West Texas Intermediate rising 0.44% to $57.12.

In Australia, the S&P/ASX 200 was 0.28% firmer at 6,845.10, reaching a fresh record close, beating the previous record set almost 12 years earlier.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.3% higher at 10,878.95, led higher by subscription broadcaster Sky - no relation to its London-listed namesake - which was ahead 4.1%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.37% at AUD 1.4543, and the Kiwi retreating 0.39% to NZD 1.5138.