Asia Stock Markets Mixed on BOJ Policy Decision

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Stocks in the Asian region were seen swinging in between gains and losses on Friday as the Japanese yen weakened, while the Bank of Japan unexpectedly introduced a negative interested rate to support the world’s third-largest economy. 

The Japanese benchmark Nikkei 225 Index slid 0.62% to trade to 16,935.64 points, while Tokyo’s Topix Index declined 0.24% to 1,388.74 points.

The Chinese benchmark Shanghai Composite gained 0.41% to 2,662.78 points, while Hong Kong’s Hang Seng Index rose 0.09% to 19,212.52 points. The South Korean Kospi Index was down 0.68% to 1,893.91 points, while in Sydney; the benchmark S&P/ASX 200 Index edged 0.51% lower to 4,950.70 points.

The Bank of Japan concluded its two-day policy meeting by lowering the interest rates to below zero on Friday. The central bank will impose negative rates on some of the current balances that the financial institutions keep at the Bank of Japan, according to reports.

The rate will be cut “further into negative territory if judged as necessary,” according to the bank’s statement.

The Japanese Yen weakened 1.3% against the US dollar, the biggest decline in almost a year.

Japan’s bond yields fell following the Bank of Japan’s policy decision. The 10-year yield fell 0.09%, compared to the last record of a 0.19% low set on January 14.

In China, the 10-year yield fell four basis points to 2.87% added 100 billion yuan more to the financial system, boosting net injections to a record of 690 billion yuan, according to reports.