Japan shares peak at 34-year highs as Bank of Japan stands firm

Posted on January 29, 2024   |  

Japanese stocks hit a new 34-year high as the Bank of Japan stuck with its loose monetary policy. 

In contrast, Chinese stocks struggled amid doubts about a substantial rescue package from Beijing for its shaky economy.

European markets are predicted to open relatively unchanged, with EUROSTOXX 50 futures up 0.1%. 

Despite profit-taking erasing early gains on the Nikkei, the index is still up by 9% for the year.

The MSCI's broadest index of Asia-Pacific shares outside Japan rose by 0.9%, fueled by a 2.9% surge in Hong Kong's Hang Seng index.

China faces economic challenges, including a worsening housing crisis and slow demand, contributing to deflationary pressures and impacting the stock market in recent weeks.

As expected, the Bank of Japan maintained ultra-low interest rates, adjusting its near-term inflation outlook and revising its fiscal 2025 forecast to 1.8% from 1.7%.

Currency markets saw the yen stabilize at 148.01 per dollar after a brief dip in response to the BOJ statement, while yields on Japanese government bonds eased 1 basis point to 0.64%.

The Australian and kiwi dollars, considered proxies for China's yuan, each gained 0.5% amid discussions about Beijing's stock market support measures.