Asian shares trade mixed; Nikkei rises after Bank of Japan decision

Asian shares traded mixed on Tuesday as investors digested the Bank of Japan’s decision to keep policy steady. The mixed showing also came on the back of Wall Street posting losses amid weakness in the technology sector.

The Nikkei 225 moved into positive territory on the back of the Bank of Japan’s policy decision. The benchmark was last higher by 0.2 percent, with gains seen in miners, shippers and insurers. Utilities and other financials tracked lower. The broader Topix, however, eased 0.48 percent.

Meanwhile, the Kospi slipped 0.1 percent after trading both above and below the flat line, with gains seen in manufacturing sector plays.

Shares of Samsung Electronics traded lower by 0.43 percent after the smartphone and chipmaker reported second-quarter operating profit came it at 14.9 trillion won (around $13.4 billion), topping the company’s own projection of 14.8 trillion won, according to Reuters. Revenue for the quarter came in at 58.5 trillion won, mostly matching an earlier forecast.

In Australia, the S&P/ASX 200 edged up, with the index gaining 0.13 percent, with the energy subindex leading gains in the afternoon. Elsewhere, Hong Kong’s Hang Seng Index edged lower by 0.55 percent.

Chinese shares were little changed going in to the lunch break following the release of official manufacturing PMI that slightly missed expectations. The Shanghai Composite 0.03 percent and the Shenzhen Composite inched down by 0.07 percent.

The broad MSCI Asia Pacific ex Japan index was trading lower by 0.33 percent in Asia afternoon trade.

Central banks were top of mind for investors, with the Bank of Japan keeping policy steady, as was widely expected, and making its policy framework more flexible for the long-term yield target. The BOJ maintained its target for the ten-year government bond yield at around zero percent.

The slight adjustment followed earlier reports that the central bank could modify its policy in order to make its program more sustainable and help improve profitability of banks there.

“Together, a stronger yen and higher JGB (Japan government bond) yields have fanned speculation that the Bank of Japan may tweak its yield curve control policy at today’s meeting … In the end, the BOJ may be simply seeking more flexibility in achieving its inflation goal rather than abandoning its commitment to monetary stimulus,” said Philip Wee, FX strategist at DBS Bank, in a note published before the central bank’s decision was announced.

The yen slipped following the announcement, trading at 111.32 to the dollar at 12:22 p.m. HK/SIN, compared to levels around the 110 handle seen before.

The mixed session in Asia also came after U.S. stocks declined on the first trading day of the week, with sharp falls in major tech names contributing to the Nasdaq Composite’s 1.39 percent drop for the day. The tech-heavy index closed at 7,630 on Monday and has recorded a three-day decline of 3.86 percent, its largest since March.

So-called FANG stocks, referring to a group of large-cap technology sector shares, turned in a poor showing on Monday: Netflix led the declines and dropped 5.7 percent and Facebook lost 2.1 percent in the wake of its quarterly results and guidance disappointing last week.

The Federal Reserve’s Federal Open Market Committee, meanwhile, was due to begin its own monetary policy meeting on Tuesday U.S. hours, with a decision due on Wednesday. The Fed is expected to keep rates steady at the end of its meeting.

The dollar index, which tracks the dollar against a basket of currencies, pared some its losses made in the last session to trade at 94.433.

Source: CNBC