Asia report: Most markets rise as BoJ stands pat on policy

Most markets in Asia finished higher on Thursday, as investors reacted to the swearing-in of Joe Biden as president of the United States, as the Bank of Japan held monetary policy steady.

In Japan, the Nikkei 225 was up 0.82% at 28,756.86, as the yen strengthened 0.13% against the dollar to last trade at JPY 103.41.

Robotics specialist Fanuc was down 0.38%, while among the benchmark’s other major components, Uniqlo owner Fast Retailing was ahead 0.83% and technology giant SoftBank Group added 2.9%.

The broader Topix index was ahead 0.6% by the end of trading in Tokyo, closing at 1,860.64.

Monetary policy was kept on hold by the Bank of Japan during, with the short-term interest rate target at -0.1% and the 10-year government bond yield target at 0%.

“The Nikkei 225 moved 0.8% higher after the Bank of Japan upgraded its economic forecast for the next fiscal year to 3.9% expansion versus a 3.6% gain seen three months ago,” said AJ Bell investment director Russ Mould.

“The top riser was advertising group Dentsu, up 5.3%, as a stronger economy could drive more promotional activity among corporates.

“Also driving the share price was news that Dentsu might sell its headquarters in Tokyo for $2.9bn.”

On the mainland, the Shanghai Composite added 1.07% to 3,621.26, and the smaller, technology-heavy Shenzhen Composite was 1.53% firmer at 2,449.37.

South Korea’s Kospi advanced 1.49% to 3,160.84, while the Hang Seng Index in Hong Kong was the region’s odd one out, slipping 0.12% to close at 29,927.76.

The blue-chip technology stocks were stronger in Seoul, with Samsung Electronics up 1.03% and SK Hynix rising 0.77%.

Sentiment was relatively rosy during the Asian session, after Joe Biden was sworn in as the 46th president of the United States overnight.

Investors moved to a risk-on mode with the transition to the Biden administration, given the new president’s keenness to implement a policy of wide-ranging economic stimulus.

“Wall Street celebrated the inauguration of Joe Biden with a decent day on the markets yesterday and this positive momentum extended across Asia and Europe on Thursday with equities pressing ahead,” Russ Mould said.

Oil prices were lower as the region went to bed, with Brent crude last down 0.87% at $55.59 per barrel, and West Texas Intermediate losing 0.83% to $52.87.

In Australia, the S&P/ASX 200 was 0.79% higher at 6,823.70, as the country’s seasonally-adjusted unemployment rate came in at 6.6% for December.

That was slightly better than the 6.7% figure expected by analysts polled by Reuters, and was an improvement from the 6.8% reading in November.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.66% at 13,112.19, as the country’s electricity generator-retailers advanced.

Contact Energy was up 4.13%, Genesis Energy added 0.8%, Mercury NZ was ahead 2.8%, Meridian Energy rose 4.35%, and Trustpower was 0.71% firmer.

Both of the down under dollar were stronger on the greenback, with the Aussie last ahead 0.35% at AUD 1.2864, and the Kiwi advancing 0.6% to NZD 1.3859.