Asian shares mostly rose on Thursday as investors awaited the Bank of Japan’s decision on monetary policy later in the week. The Bank of Japan is not expected to raise its benchmark rate, but the economy is feeling the pressure from the dollar’s surge against the Japanese yen.
Market analyst Yeap Jun Rong noted that the recent ‘hawkish hold’ outcome from the Federal Reserve could continue the upward trend of the U.S. dollar against the Japanese yen if the BOJ maintains its accommodative policy settings.
In currency trading, the U.S. dollar edged up against the Japanese yen, while the euro saw a slight decrease. The Federal Reserve kept its main interest rate steady following its latest policy meeting, and Treasury yields dropped after a report on inflation showed a lower-than-expected increase in consumer prices.
In Asian markets, Japan’s Nikkei 225 dipped slightly, while Australia’s S&P/ASX 200 surged and South Korea’s Kospi jumped. Hong Kong’s Hang Seng also gained, but the Shanghai Composite declined.
On Wall Street, the S&P 500 and Nasdaq composite reached all-time highs, with smaller companies leading the market. The prospect of lower interest rates following the inflation data boosted various investment assets, including bitcoin, gold, and copper.
Federal Reserve Chair Jerome Powell emphasized the need for sustained data showing inflation heading towards the 2% target before considering a rate cut. Lower interest rates could benefit the housing market, with homebuilders like D.R. Horton and Builders FirstSource seeing gains.
Tech stocks like Oracle, Nvidia, and Apple also contributed to the market’s positive performance. In energy trading, benchmark U.S. crude and Brent crude both saw slight declines.
Overall, investors are closely monitoring central bank decisions and economic data for signals on future monetary policy and market trends.
