Tokyo stocks rise as BoJ holds rates steady

HONG KONG: Japanese stocks rose on Thursday as the central bank kept its key interest rates steady as expected, in thin trade with most Asian markets shut for the May 1 holiday.

Tokyo’s main Nikkei 225 index closed 1.1 per cent higher after the bank’s decision caused the yen to fall against the dollar, boosting Japanese exporters.

Several markets were shut in Asia for holidays on Thursday, including in Hong Kong and mainland China. Among open indexes, Sydney edged up 0.2 per cent while New Zealand jumped 2.0 per cent.

The Bank of Japan warned that trade tariffs are fuelling global economic uncertainty and revised down its growth forecasts for the world’s fourth-largest economy. US President Donald Trump has imposed hefty levies on trading partners and imports including steel and automobiles to rectify what he says are unfair trade imbalances.

“Heightened uncertainties regarding policies including tariffs are likely to have a large impact on business and household sentiment around the world and on the global financial and capital markets,” the BoJ said.

Its policy decision sent the yen lower, with one dollar buying 144.41 yen compared to 143.13 yen Thursday morning.

“On the back of the US rally on Wednesday and strong earnings results from Microsoft and other US companies, major AI-related stocks including Advantest were bought across the board,” IwaiCosmo Securities said.

“In the afternoon, the yen weakened... following the downward revision of the Bank of Japan’s Outlook Report and other factors, which led to a broadening of the rally.”

Markets are looking ahead to Friday’s US jobs data for April, which will be the first tangible reading of economic conditions after the Trump administration´s sweeping April 2 tariffs -- many of which have been suspended.

Wall Street stocks opened sharply lower on Wednesday after US government data showed the economy shrank by an annual rate of 0.3 per cent in the first quarter, amplifying recession worries.

But they moved gradually higher through the day, rising after mid-morning data showed personal spending in March topped estimates.

As more companies pull back from earnings forecasts in the face of the uncertainty regarding US tariffs, tech giants Meta and Microsoft reported quarterly profits that were above expectations.

Shares in Meta -- which owns Facebook, Instagram and WhatsApp -- rose more than 4.0 per cent in after-market trades. “Strong earnings reports from US IT companies are expected to drive gains, led by the electronics sector,” strategist Takashi Ito of Nomura Securities told Bloomberg.