Asian Markets Rise Ahead of Bank of Japan Rate Decision Amid Global Central Bank Actions
Asian markets rose on Friday as investors awaited the Bank of Japan's interest rate decision. The MSCI Asia-Pacific ex-Japan stock index gained 0.55%, with Japan's Nikkei rising 0.9% and South Korea's KOSPI adding 2%. Lower oil prices and overnight gains on Wall Street, led by technology companies, supported investor sentiment.
The yen weakened ahead of the Bank of Japan's decision, trading at 156.23 per US dollar in morning markets. Market participants expect a rate increase of 25 basis points to a 31-year high, with further steps to curb inflation risks also anticipated.
Pepperstone head of research Chris Weston noted that volatility could return quickly if bond yields rise again, while MUFG currency strategist Michael Wan emphasized the importance of Bank of Japan Governor Kazuo Ueda's explanation of future policy path. Commonwealth Bank of Australia strategist Sarah Hammoud believes that the rate increase itself would have little effect on the yen without a convincing signal of a faster pace of subsequent steps.
The euro held near $1.148, but was heading for its largest weekly decline since June at about 1%. The spot price of gold rose 0.5% to $4,361 per ounce.