Asian Shares Mixed As BOJ Tweaks Policy

Asian stocks ended mixed on Friday, as bond yields crept up after the release of upbeat U.S. economic data and a shift in BOJ policy.

The dollar held near a three-month high as signs of a resilient U.S. economy revived fears that U.S. interest rates will stay higher for longer.

Japan’s benchmark bond yield soared to a nine-year high and the yen rallied after the Bank of Japan adjusted its bond purchase policy -marking a step toward allowing interest rates to rise.

Gold edged up slightly on risk aversion while oil prices fluctuated in Asian trade after settling sharply higher on Thursday.

Chinese shares logged strong gains on stimulus hopes after state media quote the housing minister as saying that the country needs measures such as lower home mortgage rates to help spur home purchases.

The benchmark Shanghai Composite index rallied 1.84 percent to 3,275.93 while Hong Kong’s Hang Seng index jumped 1.41 percent to 19,916.56.

Japanese shares ended lower while the yen rose after the Bank of Japan unexpectedly tweaked its monetary policy framework to allow long-term yields to move 0.5 percent in both directions.

The Nikkei average dropped 0.40 percent to 32,759.23 while the broader Topix index slipped 0.20 percent to 2,290.61.

Official data showed earlier in the day that Tokyo’s core consumer price inflation rose 3 percent in July, slightly ahead of forecasts of 2.9 percent.

Seoul stocks edged up slightly, with the Kospi average settling 0.17 percent higher at 2,608.32 on China stimulus hopes.

Investors shrugged off data showing that South Korea’s factory output fell more than expected in June.

POSCO Holdings and SK Hynix soared 3-4 percent while Samsung Electronics fell 1.5 percent and LG Chem shed 1.2 percent.

SK Innovation rose 1.3 percent after reporting improved yields from battery manufacturing in the second quarter.

Australian markets fell notably as traders booked profits after three straight sessions of gains.

The benchmark S&P ASX 200 slipped 0.70 percent to 7,403.60, with real estate, material and consumer discretionary stocks leading losses after data showed retail sales unexpectedly fell in June. The broader All Ordinaries index ended down 0.74 percent at 7,616.10.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 index finished marginally lower at 11,946.74.

U.S. stocks ended lower on Thursday and Treasury yields rose, as a slew of upbeat economic data clouded the outlook for interest rates.

The U.S. economy grew more than expected in the second quarter, weekly jobless claims continued to fall and new orders for key manufactured capital goods unexpectedly rose in June, raising concerns that interest rates could stay higher for longer.

The Dow dropped 0.7 percent to snap a 13-day winning streak despite upbeat earnings from big companies. The S&P 500 and the tech-heavy Nasdaq Composite both shed around 0.6 percent.

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