Asia report: Most markets rise as Japan maintains interest rates

Exceptions to the positive movements were seen in Australia and New Zealand, following their return from holidays on Thursday.

“Asian equities saw gains today following strong US tech earnings, rebounding from yesterday's sell-off in both US equities and bonds triggered by first-quarter GDP data showing slower growth and stronger inflation than anticipated,” said TickMill market analyst Patrick Munnelly.

“Overnight, the Bank of Japan kept short-term interest rates unchanged, as expected, maintaining them in the 0% to 0.1% range after shifting them out of negative territory last month.”

Most equity markets finish day in the green

In Japan, the Nikkei 225 rose 0.81% to close at 37,934.76, while the Topix index climbed 0.86% to 2,686.48.

Leading the gainers on Tokyo’s benchmark was Keyence, surging by 7.79%, CyberAgent rising by 5.38%, and T&D Holdings advancing by 5.35%.

In China, both the Shanghai Composite and the Shenzhen Component experienced gains, with increases of 1.17% and 2.15% to 3,088.64 and 9,463.91, respectively.

Leading the charge in Shanghai were Fujian Furi Electronics, soaring by 10.08%, and Founder Securities, climbing by 10.01%.

Hong Kong's Hang Seng Index surged by 2.12% to 17,651.15, with notable performances from Longfor Properties, up by 12.24%, China Overseas, rising by 8.99%, and JD Health International, increasing by 7.66%.

South Korea's Kospi saw gains of 1.05% to 2,656.33, with KB Financial Group up 9.67% and Hyundai Heavy Industries adding 8.98%.

However, Australian and New Zealand markets faced declines, with the S&P/ASX 200 falling by 1.39% to 7,575.90, and the S&P/NZX 50 dropping by 1.18% to 11,805.09.

Magellan Financial Group experienced a notable 5.13% decline in Sydney, while Boss Energy fell by 4.99%.

Across the Tasman Sea in Wellington, KMD Brands saw a 3.64% decline, followed by EBOS Group, which fell 3.24%.

In currency markets, the yen weakened further, with the dollar last up 0.37% to trade at JPY 156.23.

Conversely, the greenback was weaker against the Aussie, declining 0.45% to AUD 1.5272, while it slipped 0.26% against the Kiwi to change hands at NZD 1.6768.

Oil prices saw slight gains, with Brent crude futures last up 0.38% on ICE to $89.35 per barrel, and the NYMEX quote for West Texas Intermediate increasing 0.42% to $83.92.

Bank of Japan stands pat on rates, yen weakens further

In economic news, the Bank of Japan announced its decision to maintain its benchmark policy rate unchanged at 0% to 0.1%, in line with expectations.

It also confirmed its commitment to continue bond purchases as per its March decision.

BoJ governor Kazuo Ueda, in a post-meeting conference, addressed concerns regarding the weaker yen.

Ueda emphasised that while monetary policy did not directly target currency rates, exchange-rate volatility could significantly impact the economy and prices.

He noted that although the yen's weakness had not yet affected underlying inflation in Japan, there was a risk of inflation overshooting forecasts, potentially leading to a second round of cost-push inflation.

Inflation in Tokyo, often considered a leading indicator of nationwide trends, meanwhile slowed to 1.8% in April, down from March's 2.6% gain.

Core inflation, excluding fresh food prices, also declined to 1.6%, missing economists' expectations of 2.2%.

Elsewhere, Australia's producer price index (PPI) saw a notable uptick, recording a 4.3% gain in the first quarter compared to a year ago, accelerating from the prior quarter's 4.1% increase.

It marked the fastest climb since the first quarter of 2023.

On a quarter-on-quarter basis, Australia's PPI rose 0.9%.

The country's statistics bureau highlighted property operators, tertiary education, and building construction as the main contributors to the increase, with tertiary education registering the largest price surge.

Reporting by Josh White for Sharecast.com.