Tokyo stocks close higher

TOKYO (AFP/APP): Tokyo stocks closed higher on Friday after the Bank of Japan kept its key interest rate unchanged.

The benchmark Nikkei 225 index advanced 0.81 percent, or 306.28 points, to 37,934.76 while the broader Topix index added 0.86 percent, or 22.95 points, to 2,686.48.

During trading hours on Friday, the Bank of Japan said it had kept its ultra-low interest rates unchanged after a two-day policy meeting.

The bank also stopped short of signalling another hike, pushing the yen to a fresh 34-year low.

The dollar bought 156.22 yen at one point on Friday, before easing to 156.01 yen in late Tokyo hours. The greenback changed hands below levels of 156 yen before the BoJ decision.

“As there was no policy change by the BoJ, investors were relieved,” Ichiro Asai, senior strategist at SBI Securities, told AFP.

“Before the BoJ decision, investors were cautious as some reports had suggested that the Bank could tweak its policy by shrinking the size of government bond purchases,” he added.

The BoJ has been a global outlier in sticking to an ultra-loose policy while other central banks pushed rates up as they fought against surging inflation — causing a wide differential that saw investors push into other currencies.

“A cheaper yen is good for Japanese exporters but not good for companies which face rising import costs and that rely on domestic demand,” Asai said.

Investors were awaiting BoJ governor Kazuo Ueda’s press conference after the closing bell, in which “he may comment on forex”, he added.

Among major shares in Tokyo, Daiichi Sankyo jumped 5.12 percent to 5,010 yen after the drugmaker announced a share buyback and an increase in dividend payments.

SoftBank Group added 2.35 percent to 7,782 yen, and oil retailer Idemitsu Kosan rose 2.49 percent to 1,048 yen.

Honda closed up 0.26 percent to 1,750 yen after it announced an investment in Canada worth Can$15 billion (US$11 billion) for a new EV battery and vehicle assembly plant.

Its bigger rival Toyota, which announced a new investment of $1.4 billion in its Indiana plant in the United States, added 0.37 percent to 3,510 yen. Nissan ended up 0.42 percent at 549 yen.