Asian stock markets remained upbeat on Friday, tracking overnight record closes on Wall Street, while Japan’s Nikkei reversed early gains after the Bank of Japan held interest rates steady but said it would sell its holdings in ETFs and REITs.
Overnight, Wall Street’s major indexes closed at record highs. Intel (NASDAQ:INTC) shares soared more than 20% after Nvidia (NASDAQ:NVDA) unveiled a $5 billion investment in the chipmaker and announced plans to collaborate on next-generation processors.
As of 04:31 GMT, futures tied to U.S. stocks traded largely unchanged.
BOJ holds rates steady but decides to sell ETF holdings; Nikkei erases gains
The Bank of Japan left its short-term interest rate unchanged at 0.5% on Friday and announced it will begin selling its holdings of ETFs (exchange-traded funds) and REITs, a shift that kicked off concerns among investors.
Financial markets had anticipated the BOJ’s decision to hold rates steady, given slowing exports and global uncertainties, even as policymakers monitor wage growth and the persistence of price pressures.
However, Japan’s Nikkei 225 reversed early gains, sliding 1% after climbing nearly the same amount to a fresh record high of 45,852.75 points earlier in the session.
This was because the BOJ has been a reliable large-scale buyer of ETFs, effectively providing sustained demand support under major indices.
Before the decision, Morgan Stanley estimated BOJ’s ETF book at 79.5 trillion yen, out of which about 53.4 trillion yen of those assets are in TOPIX-linked ETFs and 24.6 trillion yen in Nikkei-tracked funds, meaning any sales could ripple across the entire market.
Source : Investing.com