Asian shares were mixed yesterday despite a strong lead from Wall Street as markets awaited testimony from the US Federal Reserve chief, but Tokyo stocks finished at their highest level in five years.
Japanese investors welcomed the weakening yen, with stocks ending up 1.6%, or 246.24 points, at 15,627.26, the best finish since late December 2007.
The market maintained early gains after the Bank of Japan (BoJ) wrapped up a two-day meeting with a unanimous vote to keep its monetary policy unchanged, as the country attempts to tackle years of deflation.
Seoul climbed 0.64%, or 12.74 points, to finish at 1,993.83, while Sydney ended down 0.28%, or 14.7 points, at 5,165.4.
Shanghai closed down 0.12%, or 2.71 points, at 2,302.40 on profit-taking after gaining nearly four% in the past five sessions.
Hong Kong finished down 0.45%, or 105.29 points, at 23,261. The start of trading was delayed until the afternoon due to severe rainstorms.
Markets were watching for Fed chairman Ben Bernanke’s testimony to Congress later yesterday for signs the US central bank might be ready to alter its quantitative easing policy, or to project when and how it might reel in its aggressive bond purchases.
The Bank of Japan said in a statement yesterday that it would continue with the monetary easing as it targets 2% inflation.
“Such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan’s economy to overcome deflation that has lasted for nearly 15 years,” it said.
The bank said the world’s third largest economy had already “started picking up” as exports have stopped falling due to recovering overseas economies.
The BoJ statement came after the finance ministry announced a larger-than-expected April trade deficit, with the red ink expanding 69.7% on year to ¥879.9bn ($8.6bn).
The dollar was up against the Japanese currency, fetching ¥102.85 in Tokyo afternoon trade, from 102.47 in New York late Tuesday. The euro rose to ¥133.09 from ¥132.26 and to $1.2929 from $1.2906.
Oil was down in Asia, with New York’s main contract, light sweet crude for delivery in July, dropping 48¢ to $95.70 a barrel. Brent North Sea crude for July delivery shed 34¢ to $103.57.
Gold was at $1,384.40 at 1040 GMT from $1,387.90 late Tuesday.
In other markets, Bangkok lost 0.74% or 12.16 points to 1,631.27; Jakarta rose 0.37%, or 19.24 points, to 5,208.00; Manila closed up 0.78% or 57.49 points to 7,385.07; Kuala Lumpur lost 0.20% or 3.50 points to close at 1,783.88; Singapore rose 0.30% or 10.47 points to 3,454.37; Taipei was up 0.19% or 15.79 points at 8,398.84; and Wellington rose 0.42% or 19.34 points to 4,610.18.