TOKYO: Japan’s Nikkei share average cut early losses after the Bank of Japan kept stimulus unchanged on Friday and signalled it was in no rush to tighten policy.
The benchmark index had earlier dipped to a nearly four-week low, tracking sharp declines on Wall Street amid worries about a more hawkish Federal Reserve.
The Nikkei was down 0.28% at 32,481.02, as of 0333 GMT, shortly after trading resumed for the afternoon session. The broader Topix was down 0.28%, compared with a 0.64% drop as of the midday recess.
In a statement accompanying the decision, the BOJ repeated a pledge to keep ultra-loose monetary policy “as long as necessary to maintain the (2% inflation) target in a stable manner.”
Friday’s decision was closely watched after BOJ Governor Kazuo Ueda hinted in a newspaper interview earlier this month that an end to negative interest rates could come as early as this year. Ueda’s news conference is scheduled for half an hour after the stock market close, at 0630 GMT.
“There was a buzz of speculation that we might witness some changes in the central bank’s forward guidance - however, these anticipations have been quelled,” said James Kniveton, a senior corporate foreign-exchange dealer at Convera in Melbourne.
Price pressures have also stoked speculation that the BOJ will need to shift to a more hawkish stance, with data earlier on Friday showing core inflation sticking above the central bank’s target for a 17th straight month.
The BOJ has been a global outlier in keeping to ultra-easy stimulus as the Fed and most other major peers adopt a mantra of higher rates for longer to tackle stubborn inflation.
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