Asia-Pacific markets rose Friday, tracking Wall Street gains as geopolitical concerns eased and investors assessed Bank of Japan’s decision to keep interest rates steady.
In Japan, the Nikkei 225 gained 157.05 points, or 0.3%, to 53,846.87.
Japan’s central bank held its key policy rate at 0.75% as the country prepares to go into an election in which Prime Minister Sanae Takaichi, who advocates for monetary easing and fiscal support, will face voters for the first time. Takaichi on Friday dissolved Japan’s Lower House, with the country set to go to polls in a snap election on Feb. 8.
Japan’s 40-year government bond yield slid over four basis points to 3.953% after hitting a record high on Tuesday.
Meanwhile, yields on shorter maturities climbed. The 10-year Japan government bond yield rose by around 2 basis points to 2.259%, while yields on the 20-year tenor inched higher by less than a basis point to around 3.204%.
Bank of Japan Governor Kazuo Ueda said it was still too early to fully assess the impact of past interest-rate hikes, noting that financial conditions in Japan remain accommodative despite the policy shift, according to translations by Reuters.
Speaking at a post-meeting news conference, Ueda said companies’ demand for funds continues to rise moderately and that banks remain active in extending loans.
He added that the central bank would need more time to gauge how December’s rate increase feeds through to the economy and would continue to scrutinize developments closely.
The yen weakened to 159 levels against the greenback before strengthening to 157.3 within minutes, data by Lseg showed.
HSBC said it expects the Bank of Japan’s next 25 basis point hike to come in July 2026, but warned that further yen depreciation could bring forward the timing and open the door to more rate increases.
The bank flagged April as a possible alternative, citing the release of the BOJ’s quarterly Outlook report and improved clarity on this year’s Shunto wage talks, with another 25 bps hike potentially following later in 2026.
Japan’s headline inflation rate in December slowed sharply to 2.1%, its lowest level since March 2022. Its core inflation rate came in at 2.4% on year, in line with analysts’ estimates.
Some tech stocks in Asia fell after shares of California-based Intel plummeted 13% in after-hours U.S. trading on its soft guidance for the current quarter, despite posting fourth-quarter earnings beat Thursday.
SoftBank Group was down over 4%, while Lasertec fell nearly 6%. Tokyo Electron declined over 1%. South Korea’s SK Hynix dipped 1%.
Hong Kong’s Hang Seng index took on 119.55 points, or 0.5%, to 26,749.51
In other markets
The CSI 300 in Shanghai dished off 21.21 points, or 0.5%, to 4,702.50.
In Korea, the Kospi jumped 37.54 points, or 0.8%, to 4,990.07.
In Taiwan, the Taiex vaulted 215.43 points, or 0.7%, to 31,961.51.
In Singapore, the Straits Times Index assembled 63.13 points, or 1.3%. to 4,891.45.
In New Zealand, the NZX 50 fell back 108.63 points, or 0.8%, to 13,448.24
In Australia, the ASX 200 nicked ahead 11.39 points, or 0.1%, to 8,860.09.
