Nikkei gains, JGB futures rise ahead of expected BoJ rate hike

TOKYO: Japan’s Nikkei share average advanced on Friday and Japanese government bond futures rose ahead of a Bank of Japan policy decision, with markets widely expecting an interest rate hike later in the day. The Nikkei gained 0.6 percent to 49,306.95, as of 0014 GMT, and earlier jumped as much as 1percent.

That followed a 1percent drop in the previous session, when the index sank to a 3 1/2-week low. The broader Topix added 0.6 percent to 3,376.67.

Benchmark 10-year JGB futures added 0.09 yen to 133.43 yen. Cash bonds had yet to trade. The BOJ decision does not come at a set time, but is generally between 0330-0500 GMT. BOJ Governor Kazuo Ueda will hold a news conference from 0630 GMT.

A large majority of economists in a Reuters poll predicted the central bank BOJ will raise short-term interest rates to 0.75 percent from 0.5 percent, which would mark the first increase since January.

“Economic conditions arguably justified a hike ahead of the monetary committee’s October meeting, and recent data only strengthens the case,” James Brady, vice president at Teneo, said in a note.