Japan’s property shares up amid BOJ’s new policy

Japan’s real estate shares surged on Tuesday following the Bank of Japan (BOJ) ended its negative rates regime, as reported by Bloomberg.

The Topix real estate companies surged 4.5 per cent, marking their largest increase since March 2022. The BOJ’s new policy rate and commitment to accommodative financial conditions boosted investor sentiment.

In contrast, Japanese banks experienced a decline after the BOJ’s announcement, as the sector had been rallying in anticipation of rate hikes and improved profitability.

Investors are now shifting their focus to real estate stocks, driven by the perception of a continued accommodative environment and the transition from deflation to inflation.

Leading real estate companies like Mitsubishi Estate Co., Sumitomo Realty & Development Co., and Mitsui Fudosan Co. saw notable gains, with Mitsubishi Estate Co. jumping 5.3 per cent and Sumitomo Realty & Development Co. soaring 8.3 per cent.

The broader Topix index also rose by 1.1 per cent. The Topix real estate index has been on an upward trend ahead of the BOJ’s decision, surging more than 10 per cent in the past four days since October 2007.