On Friday, Japan’s Nikkei share average saw a rise after the Bank of Japan (BOJ) decided to leave its policy settings unchanged, hinting that a decision regarding the reduction of bond purchases would come in the following month. At 38,872.21, the Nikkei was up by 0.4% as of 0334 GMT, shortly after reopening post the midday recess. The morning session had ended flat, with the BOJ’s announcement arriving during the break.
The broader Topix index extended its morning gains, up by 0.5%. However, the Topix banking index saw a drop of up to 1%, reversing its earlier gains. Investors started the day with anxiety, eager to learn the fate of the central bank’s significant 6 trillion yen ($38.14 billion) monthly bond-buying programme. Reports from Reuters and other media suggested that the BOJ might trim purchases by about 1 trillion yen.
Despite these reports, the BOJ announced it would trim buying “to ensure that long-term interest rates would be formed freely in financial markets”, but indicated that this change would occur at the July meeting after discussions with market participants. Attention now shifts to BOJ Governor Kazuo Ueda’s news conference, scheduled for 0630 GMT. Investors will also watch for hints regarding a potential July interest rate increase, following the first hike since 2007 that took place in March.
Value shares continued to outperform in the Tokyo afternoon, with the Topix’s value share sub-index up by 0.9%, compared to a 0.6% increase in growth stocks. The shipping sector remained the best performer among the Tokyo Stock Exchange’s 33 industry groups, rising by 3.7%. Some chip and artificial intelligence-related shares also outperformed, following a rally by U.S. peers overnight.
AI-focused startup investor SoftBank Group extended its earlier gains, up by 4.23%, and remained the biggest points gainer on the Nikkei. Chip-testing equipment giant Tokyo Electron also saw an increase, adding 0.8%. The exchange rate was noted at $1 = 157.3100 yen.
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