Asian Stocks Mixed as Bank of Japan Hints at New Stimulus Measures in October

Journalist:
September 19, 2019

Stocks in the Asia Pacific region diverged on Thursday, as investors assessed the Bank of Japan‘s (BOJ) latest policy decision, which maintained the status quo on a long-running stimulus program designed to boost growth and inflation.

Asian Stock Markets Diverge

Japanese stocks were the clear-cut winners on Thursday, as investors dissected new developments around monetary policy from around the world. The benchmark Nikkei 225 in Tokyo rose 1% to 22,183.53, where it was on track for its highest settlement in four months.

Japan’s benchmark Nikkei 225 has gained 7.5% over the past month. | Chart: Yahoo Finance

Mainland China’s CSI 300 Index rallied 0.2%. The ASX 200 Index, Australia’s benchmark, rose 0.6%.

Hong Kong markets were down more than 1%, while the MSCI AC Asia Pacific edged down 0.1%.

BOJ Keeps Policy on Hold

The Bank of Japan kept monetary policy on hold Thursday, but signaled changes could be coming as early as October. | Image: REUTERS/Kim Kyung-Hoon/File Photo

Officials at the BOJ voted on Thursday to maintain short-term interest rates at -0.1% and the 10-year government bond yield at zero. The decision was widely predicted by analysts.

In keeping policy on hold, the central bank signaled the possibility of new stimulus measures as early as October.

From the official statement:

“The BOJ judges that it is becoming necessary to pay closer attention to the possibility that the momentum towards achieving its price target will be lost.”

It added:

“Taking this situation into account, the BOJ will re-examine economic and price developments at its next policy meeting, when it updates the outlook for economic activity and prices,” it said.

Central banks will remain in focus later in the day, with the Bank of England (BOE) set to announced its interest rate decision. Like the BOJ, the British central bank is widely expected to stand pat on monetary policy.

U.S. Stock Futures Tumble

The Dow and S&P 500 narrowly avoided losses on Wednesday following the Federal Reserve’s decision to lower interest rates for the second time in as many meetings. Futures on the main equity gauges declined in overnight trading, pointing to a rocky open on Wall Street.

Futures on the Dow Jones Industrial Average (DJIA) were last down 46 points, or 0.2%, according to Bloomberg. S&P 500 futures contracts fell 0.2%. Futures on the technology-laden Nasdaq declined 0.4%.

This article was edited by Sam Bourgi.

Last modified (UTC): September 19, 2019 03:28

Sam Bourgi @hsbourgi

Financial Editor to CCN Markets, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com