Asian Markets at Close Report by MarketWatch on January29, 2015> Nikkei Jumps After BOJ-s Rate Surprise< China Stocks Gain.
The Nikkei Stock Average NIK, +2.80% finished up 2.8% at 17,518.3, after seesawing earlier as investors tried to interpret the BOJ news.
The Japanese yen USDJPY, +1.70% initially reached its weakest against the U.S. dollar this year but was last up 1.7% at ¥120.65 to one U.S. dollar.
The gains in Japanese stocks lifted most other Asian markets by their closes. Australia’s S&P/ASX XJO, +0.59% rose 0.6%, and South Korea’s Kospi SEU, +0.27% rose 0.3%.
Hong Kong’s Hang Seng Index HSI, +2.54% closed 2.5% higher.
The Shanghai Composite Index SHCOMP, +3.09% finished up 3.1% at 2,737.60, with its gains accelerating in the last hour. Still, the benchmark posted its worst monthly performance since the global financial crisis: It lost 23% this January, compared to its 25% loss in October 2008.
In Japan, the central bank’s monetary policy expansion came amid a sputtering domestic economy, stubbornly low inflation and turbulent global financial markets. The BOJ said it cut the deposit rate it pays on cash being parked at the BOJ by commercial banks in excess of legally required reserves, to minus 0.1% from the previous plus 0.1%. The goal was to push down borrowing costs across a broad time spectrum to stimulate inflation, the bank said.
It kept unchanged the volume of its purchases of Japanese government bonds, exchange traded funds and real estate investment trusts.
Investor speculation of more monetary stimulus had been building, particularly after the Nikkei Stock Average on Jan. 21 fell to its lowest level since Oct. 30, 2014, the day before the BOJ’s last major easing.
Japan unveils first stealth aircraftJapan's Defense Ministry unveiled the X-2 on Thursday, its first radar-evading stealth plane, aiming to close a gap with China and Russia.
Expectations that investors will take money out of Japanese banks to invest in other areas of the domestic economy, like real estate, sent banking and property shares in separate directions: Some of Tokyo’s worst performers included Shinsei Bank Ltd., which fell 11%, and Mitsubishi Financial Group Inc. which fell 2.8%. Sumitomo Realty & Development Co Ltd. was up 11.9% and Mitsubishi Estate Co. Ltd. was up 10.3%.
In China, shares turned higher in the morning after China’s central bank pumped an additional 100 billion yuan ($15.21 billion) into the financial system via an extra money-market operation. That pushed this week’s net cash injection to a record 690 billion yuan. The move comes as local Chinese withdraw cash in anticipation of the weeklong Lunar New Year holiday that starts Feb. 7.
On Friday, the Shanghai Composite hit an intraday peak about a half hour before the market’s close. Traders have been watching the market closely in final hour, because it has dropped on several occasions. Investors worry that Beijing isn’t propping up shares through state-backed funds, which had jumped in during rocky sessions last year to buy shares.
In currencies, the Malaysian ringgit MYRUSD, +0.4384% surged 1.9% to a three-month high against the U.S. dollar, after the release of the revised Malaysian budget and comments from Prime Minister Najib Razak that the currency was undervalued.