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Yen jumps against dollar as Japan keeps rates on hold | |
(about 5 hours later) | |
The Japanese yen has climbed by more than 2% against the US dollar, after the Bank of Japan decided to keep interest rates on hold after its two-day meeting. | |
The BoJ has also kept its target for government bond buying unchanged. | |
But the central bank will double its annual purchase of exchange traded funds to 6tn yen ($57bn; £43bn) from the current 3.3tn yen. | |
Market watchers had been expecting more from the central bank. | |
Especially after Prime Minister Shinzo Abe announced earlier this week of a 28tn yen stimulus plan to help boost the flagging economy. | |
The Nikkei 225 headed lower, by 0.2% to 16,456.86 after the decision. The benchmark index had opened flat at the start of Friday's session. | |
Data earlier in the day showed Japanese household spending fell 2.2% in June from a year earlier. And retail sales dropped 1.4% in the same month from the previous year. | |
These are the latest signals that domestic consumption remains weak in the world's third-largest economy. | These are the latest signals that domestic consumption remains weak in the world's third-largest economy. |
Meanwhile, core consumer prices fell for a fourth straight month in June, in another blow to Japan's war on deflation. | Meanwhile, core consumer prices fell for a fourth straight month in June, in another blow to Japan's war on deflation. |
But industrial output rose 1.9% in June, better than the 0.7% many economists were expecting. | But industrial output rose 1.9% in June, better than the 0.7% many economists were expecting. |
The Bank of Japan introduced a negative interest rate policy in January this year. | The Bank of Japan introduced a negative interest rate policy in January this year. |
Pharmaceutical deal | |
Elsewhere in Asia, China's benchmark Shanghai Composite index has opened 0.2% lower at 2,989.07. | |
Meanwhile in Hong Kong the Hang Seng index was down 0.5% in early trade at 22,071.75. | |
But shares of Shanghai Fosun Pharmaceutical, trading in Hong Kong were up by more than 2%, outperforming the broader market. | |
The rise was triggered by news the firm has agreed to acquire up to 86% of India's Gland Pharma, for up to $1.3bn (£1bn). The Indian firm manufactures generic injectable drugs, which are mostly sold in the United States. The deal marks the largest acquisition of an Indian company from an overseas interest this year. | |
In South Korea, the Kospi kicked off Friday's session 0.2% higher at 2,025.24. | In South Korea, the Kospi kicked off Friday's session 0.2% higher at 2,025.24. |
And over in Australia, the benchmark ASX 200 share index opened flat at 5,561.30. |