Asian Stocks Close Broadly Higher Despite Paring Early Gains

Asian stocks closed broadly higher on Friday, although most of the markets in the region turned a bit subdued and pared early gains as the day progressed. The undertone remained positive with investors continuing to cheer the Federal Reserve’s decision to cut interest rates by 50 basis points.

The Japanese market outperformed despite paring some gains after the Bank of Japan decided to hold rates unchanged.

The Nikkei 225 ended up 619.00 points or 1.67% at 37,739.50.

Tokai Carbon, Resonac Holding Corp, Kawasaki Heavy Industries, Tokyo Electron, Fujikura, Mitsui, Fast Retailing, Furukawa Electric, Fanuc Corp, Sumco Corp and Mitsubishi UFJ Financial were among the major gainers in the Japanese market.

NTT Data Corp, Kansai Electric Power, Keisei Elecgric Railway, Shimizu Corp., Taisei Corp and Tobu Railway were among the notable losers.

The Bank of Japan maintained its benchmark rate unchanged as widely expected on Friday.

In a unanimous vote, the Policy Board decided to maintain the uncollateralized overnight call rate to remain at around 0.25 percent.

The BoJ had ended its negative interest rate policy in March.

In the statement, the BoJ said the economy has recovered moderately, although some weakness has been in part.

Capital Economics’ economist Marcel Thieliant said the BoJ will hike its policy rate once more by a quarter point at its October meeting.

Data from the Ministry of Internal Affairs & Communications said the annual inflation in Japan rose to 3% in August (the highest level since October 23) from 2.8% in the prior three months.

On monthly basis, the CPI rose by 0.5% in August, after a 0.2% increase in July.

The core consumer price index in Japan increased by 2.8% year-on-year in August, the highest reading since February.

Chinese stocks struggled a bit after the People’s Bank of China kept its benchmark loan prime rate unchanged. The Shanghai Composite Index ended at 2,736.81, little changed from its previous closing level.

China retained its benchmark lending rates on Friday even after the US Federal Reserve reduced its rate by a sharper-than-expected half a percentage point this week.

The People’s Bank of China kept its one-year loan prime rate unchanged at 3.35 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was retained at 3.85 percent.

The bank had last reduced the LPR in July, by 10 basis points.

Hong Kong’s Hang Seng settled with a gain of 245.41 points or 1.36% at 18,258.57, nearly 100 points off the session’s high of 18,355.15.

Australian benchmark S&P/ASX 200, which rose to a record high of 8,246.20, ended the day at 8,209.50, gaining 17.60 points or 0.21%. The broader All Ordinaries Index settled with a gain of 20.20 points or 0.24% at 8,437.20, nearly 40 points off the day’s high of 8,474.10.

Seek, Domino’s Pizza Enterprises, Super Retail Group, Carsales.com, James Hardie Industries, Bluescope Steel, Reece, Seven Group Holdings and Flight Centre gained 2 to 4%.

Telix Pharma soared more than 8%. Regis Resources, Aussie Broadband and James Hardie Industries also closed notably higher. Bank stocks closed with modest gains.

IGO, Mineral Resources, Computershare, Sonic Healthcare, Orica and Suncorp were among the notable losers.

South Korea’s KOSPI closed up 12.64 points or 0.49% at 2,593.44, with technology stocks finding good support.

Hitron Systems, SNT Dynamics, Yuhan, Sajo Seafood, Boryung Pharma, JW Holdings and YoungPoong soared 12 to 30%.

Markets in Singapore, New Zealand and Indonesia closed weak, while the Malaysian market ended modestly higher.