Tokyo shares rebound as BoJ tweaks yield policy

TOKYO: Tokyo stocks ended higher Tuesday as investors breathed a sigh of relief after the Bank of Japan only tweaked its loose monetary policy.

The benchmark Nikkei index, which traded lower before the central bank’s decision, firmed to close up 0.53 percent, or 161.89 points, to 30,858.85, while the broader Topix index also rose 1.01 percent, or 22.48 points, to 2,253.72.

The BoJ said it would let benchmark Japanese government bond yields rise to around, but not strictly up to, 1.0 percent, slightly increasing the flexibility of its programme.

Still, the central bank broadly maintained its existing easy policy, including its negative interest rate policy.

“The market was mixed before the BoJ meeting. The decision came out and there were some changes but it was not major tightening. So people were relieved by that,” Chihiro Ota of SMBC Nikko Securities said.

The announcement sent the yen weaker against the dollar and late afternoon it stood at 150.14 yen to the dollar, compared with 149.72 yen in New York on Monday.

Investors will turn their focus back to the US Federal Reserve’s rate decision this week, while weighing the risk of a regional conflict in the Middle East, analysts said.

Japan’s Nikkei jumps, led by rally in chip shares

In Tokyo, Panasonic dived 8.91 percent to 1,309 yen after it revised down its sales and operating profit forecast for the full year to March 2024.

Electronics and IT solution firm NEC sank 3.73 percent to 7,205 yen after it reported a rise in the second-quarter operating profit but missed market consensus.

Central Japan Railway added 1.49 percent to 3,396 yen after it revised up sales and profit forecasts for the full year to March 2024.

Banks performed well, with Mitsubishi UFJ Financial Group rising 2.20 percent to 1,257 yen and Mizuho Financial Group adding 1.33 percent to 2,545.5 yen.

Japan’s jobless rate in September stood at 2.6 percent, down from 2.7 percent in the previous month, according to the internal affairs ministry. The data did not prompt a strong market reaction.