Japan’s Nikkei goes up a lot, and Asian stocks go up slowly as a result of the dovish BOJ.
Most Asian stocks were cautiously up on Wednesday, following dovish signals from the Bank of Japan. Japan’s Nikkei index, on the other hand, jumped to a near one-month high on the idea that the country’s monetary policy would stay easy.
The best performer of the day was the Nikkei 225 index, which went up 2.5% to its highest level since late December. The index was mostly helped by the fact that the BOJ kept its current range of control over the yield curve. This was because the market was expecting the bank’s policy to get even looser.
The central bank kept interest rates at record-low levels and said it will keep its policy “accommodative” for now, which is good news for local stocks because it means there is a lot of money in the market.
Related: Asian stocks go up because people think China will get better and the Fed will raise interest rates less.
Still, the country is also dealing with a rise in inflation, which has hurt economic growth over the past few months.
Core machinery orders fell more than expected in November, which shows that Japanese companies are still hesitant to make long-term investments in capital.
Asian stocks as a whole were slightly higher on Wednesday, but investors were still worried about a possible recession this year.
Several surveys released this week showed that economists and business leaders are becoming more pessimistic about the global economy this year. This is because of high inflation, tight monetary policy, and continued problems with the supply chain.
A possible recession in the world’s biggest economies is likely to hurt the risky Asian markets because it will cut down on the amount of foreign money that can be invested in the area.
The markets were also waiting for clues about the U.S. economy from a series of Federal Reserve speakers and data sets coming out this week. Even though the Fed is likely to slow down the rate of rate hikes, recent data on the U.S. economy shows that growth is slowing.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moved in a narrow range on Wednesday, as attention remained on the country’s reopening of its economy and the spread of COVID-19. But Hong Kong’s Hang Seng index went up 0.3%, thanks mostly to big tech stocks and signs that regulators are becoming less strict.
India’s Nifty 50 and BSE Sensex 30 indexes both went up by about 0.6%. This was due to some optimism about the country’s slowing inflation, even though economic growth is expected to slow in 2023 after being stronger than expected in 2022.
Related: As the Fed minutes take centre stage, Asian stocks rise and the dollar fluctuates.
The best performers in Southeast Asia were Philippine stocks, which went up 0.6%, while Malaysian stocks went down 0.4% after data showed that the country’s imports and exports got worse in December.