Trading in Asian equities was largely mixed Friday after the Bank of Japan (BOJ) only announced modest easing measures. The highly anticipated BOJ meeting decided to double purchases of stock-funds, but left most other easing policies unchanged.
The decision wasn’t a major surprise to many as a large number of traders and analysts in Tokyo and elsewhere had expected the central bank to behave the way it did. But they still hoped that whatever easing measures announced on Friday would be more accommodative than existing ones. That explains why the BOJ ended up disappointing some markets after it left some easing options untouched in the latest policy meeting.
To some, BOJ’s mild easing measures signal that risks to the Japanese economy may be subsiding. But to others, it appears that the central bank is running out of easing options. The mixed sentiments explain the mixed trading in Asian stocks on Friday.
But BOJ’s mild measures helped shore the yen up with the safe-haven currency gaining ground against the greenback compared to its recent levels. The USDJPY fell 1.85% to 103.32 and the EUR/JPY declined 1.77% to 114.56.
BOJ now expects the Japanese economy to expand at a slower rate of just 1% in the current fiscal year compared to its earlier growth forecast of 1.2%.
How BOJ sentiment rattled Asian stocks
Because many traders had prepared for a not-so-robust easing measure from BOJ, equity losses across Asia were a bit limited on Friday.
In Tokyo, the Nikkei 225 (INDEXNIKKEI:NI225) was up 0.56% at close, helped by gains in Insurance, Banking and Marine Transport sectors.
In Taiwan, the Taiwan Weighted pulled back 1.02%, led down by losses in the country’s Internet and Semiconductor sectors. In South Korea, the KOSPI declined 0.24%.
Shares in China were largely down as the larger Shanghai Composite slid 0.5% and the smaller Hong Kong-based HANG SENG INDEX (INDEXHANGSENG:HSI) was seen trending down 1.2%.
In Australia, stocks closed higher as the S&P/ASX 200 rose 0.07 at close to hit a new 6-month high. Gains in Australia were driven by stocks in Healthcare, Consumer Discretionary and Gold sectors.
The Aussie firmed up against the greenback with the AUDUSD gaining 0.24%.