Japan equities and bond yields jumped after the central bank raised its policy rate to a three-decade high. The decision comes as inflation has stayed above its target levels for nearly four years now.
The Nikkei 225 regrouped 505.71 points, or 1%, to 49,507.21.
The Bank of Japan raised benchmark rates by 25 basis points to 0.75%, their highest level since 1995, and in line with expectations of economists polled by Reuters.
Japan’s consumer inflation rate dropped to 2.9% in November, government data showed Friday. Core inflation, which strips out prices of fresh food, remained unchanged from 3% in October, and came in line with Reuters-polled economists’ average estimate.
The Japanese yen weakened 0.33% to 156.06 against the greenback.
Yields on the 10-year government bond rose over 3 basis points to 2.022%, the highest since 1999, data from LSEG showed. Yields on the 20-year rose over two basis points to 2.962%.
Reuters reported that South Korea’s central bank is intervening in currency markets by selling dollars to limit declines in the won, according to Yoon Kyoung-soo, director general of the Bank of Korea’s international department. He added that authorities are conducting “smoothing operations” to counter sharp, one-sided moves driven by severe supply-demand imbalances.
The won has recently been trading around its weakest since 2009, and was last at 1,479 against the greenback.
In Hong Kong, the Hang Seng added 192.40 points, or 0.8%, to 25,690.53.
In other markets
The CSI 300 in Shanghai regained 15.39 points, or 0.3%, to 4,568.18.
In Korea, the Kospi regained 26.04 points, or 0.7%, to 4,020.55
In Singapore, the Straits Times Index retreated 0.83 points to 4,569.78.
In Taiwan, the Taiex galloped 227.82 points, or 0.8%, to 27,696.35.
In New Zealand, the NZX 50 recovered 76.63 points, or 0.6%, to 13,333.40.
In Australia, the ASX 200 picked up 33.15 points, or 0.4%, to 8,621.35.
