Asian equities mostly rose following the Bank of Japan’s increase of its key lending rate and Donald Trump’s indication of a more conciliatory approach toward China.
Tokyo’s Nikkei 225 index slightly declined to 39,930.79 after the central bank elevated its benchmark rate to approximately 0.5% from 0.25%, aligning with widespread expectations.
This rate marks the highest level since 2008, signaling the Bank of Japan’s departure from an extended period of exceptionally low interest rates designed to encourage borrowing and spending.
Just prior to the rate decision, government data revealed that the core inflation rate rose to 3% year-on-year in December, the highest in 16 months and exceeding the central bank’s 2% target.
The US dollar weakened against the Japanese yen, trading at 155.24 yen, down from 156.06 yen.
Oil prices declined after the US President urged oil-producing nations to lower crude prices, alleviating concerns about inflation.
Meanwhile, Chinese stocks advanced after President Trump expressed a preference to avoid imposing tariffs on the world’s second-largest economy.
In Hong Kong, the Hang Seng Index increased by 2% to 20,100.60, while the Shanghai Composite Index climbed 0.8% to 3,255.28. South Korea’s Kospi rose 0.9% to 2,537.61, and Australia’s S&P/ASX 200 gained 0.4% to 8,408.90.
On Wall Street, the S&P 500 reached a record high after President Trump announced his intention to advocate for lower interest rates, boosting stock markets amid investor uncertainty regarding his future trade policies.
The S&P 500 closed up 0.5% at 6,118.71, after peaking at an all-time high of 6,118.73 points. The Dow Jones Industrial Average increased by 0.9% to 44,565.07, and the Nasdaq Composite edged up 0.2% to 44,565.07.
Additionally, the yield on benchmark 10-year US Treasury notes rose to 4.646% from 4.612% late Wednesday.
