Major Asian indicators largely declined on Wednesday. The only indices that closed in positive territory were the S&P/ASX 200, which gained 1.2%, and the Hang Seng Index, which rose by 0.5%. All other indices declined, with the Shanghai Composite and the Shenzhen Composite losing 0.3% and 0.45% respectively, the KOSPI shedding 0.2%, and the Nikkei 225 decreasing by 0.8%.
The decision of the Bank of Japan to leave the interest rate unchanged and increase the government bond yield range from +-0.25% to +-0.5% was one of the reasons for the instability in the Asian markets yesterday. The markets did not expect such a move, which led to the Japanese yen gaining as much as 4% against the US dollar. Nevertheless, this step is not enough to reduce risks for the markets, analysts say.
Such a decision by the Japanese central bank may be the first step towards ending its ultra-dovish monetary policy, which has been implemented in the country for many years. Nevertheless, the governor of the BOJ does not consider such measures to be a step towards tightening monetary policy.
As a result, major Japanese stocks went down. Shares of Toyota Motor fell by 1.9%, Honda Motor lost 2.5%, Canon dropped by 2.4%, and Sony Group decreased by 1.3%.
Japanese IT companies also suffered losses, with Tokyo Electron falling by 1.2%, Keyence moving down by 2.2%, and Renesas Electronics losing 1.9%.
China continues to ease quarantine restrictions, which gives traders hope for economic recovery. However, the rising number of COVID-19 infections dims the economic outlook somewhat.
Several companies have been forced to resort to various measures to prevent production cuts due to increased spread of COVID-19 among employees. For example, Volkswagen has announced plans to extend shifts for employees at its factory in the Chinese city of Foshan. Shares of Great Wall Motor slid down by 1.2% and 1.9% at exchanges in Hong Kong and Shanghai respectively.
At the same time, other stocks posted gains, with Kweichow Moutai adding 0.9%, ICBC gaining 0.5% and Agricultural Bank of China rising by 0.4%.
In South Korea, the KOSPI decreased due to falling stock prices of the country's largest companies. For example, shares of Samsung Electronics lost 1%.
Meanwhile, in Australia, the S&P/ASX 200 went up as major Australian stocks advanced. Shares of BHP Group gained 1.3%, Fortescue Metals rose by 1.7%, Newcrest Mining added 4%, and Woodside Energy increased by 2.7%.
