Asian markets were mostly up, except for Japan, where investors were holding back ahead of Sunday’s election.
Prime Minister Shigeru Ishiba, who recently took office, called for a snap general election to shore up support as the ruling Liberal Democratic Party faces a political funding scandal. The recent political turbulence has increased market uncertainty, complicating the Bank of Japan’s efforts to move away from long-standing near-zero interest rates.
Tokyo reported that core inflation in the capital dropped to 1.8% in October, below the central bank’s 2% target for the first time in five months. This reinforced expectations that the Bank of Japan will maintain its key interest rate at next week’s policy meeting.
Japan’s Nikkei 225 index fell 1% to 37,771.79, while the yen appreciated against the US dollar.
In contrast, Hong Kong’s Hang Seng index rose 1.1% to 20,720.60, and the Shanghai Composite climbed 0.8% to 3,307.14.
China’s central bank kept its medium-term lending rate at 2% and issued 700 billion yuan (£75.8bn) in one-year medium-term loans to financial institutions, as announced in a bank statement.
Elsewhere, South Korea’s Kospi inched up 0.3% to 2,590.30, Australia’s S&P/ASX 200 edged higher by 0.1% to 8,216.50, and Taiwan’s Taiex gained 0.3%.
In the U.S., Wall Street saw mixed results. The Dow Jones Industrial Average dipped 0.3% to 42,374.36, while the S&P 500 edged up 0.2% to 5,809.86, and the Nasdaq Composite gained 0.8% to 18,415.49.
In the bond market, the yield on 10-year U.S. Treasury notes fell to 4.217% from 4.231% on Wednesday. It has been rising in recent weeks, partly due to expectations of increased government spending by both candidates in the U.S. presidential election, which could widen the budget deficit, according to Mark Malek, Chief Investment Officer at SiebertNXT in New York.
