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Most Asian stock markets advanced on Friday, supported by gains in technology shares, while Japanese equities held on to mild gains after the Bank of Japan left interest rates unchanged, in line with expectations.
The BOJ raised its inflation and growth forecasts, shifting market focus to an upcoming address by Governor Kazuo Ueda later in the day.
Regional sentiment was lifted by a second straight rebound on Wall Street, after U.S. President Donald Trump softened his rhetoric over Greenland. Still, caution lingered after Trump referenced a U.S. “armada” heading toward Iran, keeping risk appetite in check and helping push gold to a fresh record high.
Despite Friday’s gains, most Asian markets were still set for a weak weekly finish after sharp declines earlier in the week sparked by geopolitical uncertainty and renewed concerns over fiscal health in developed economies.
Japan Edges Higher After BOJ Decision
Japan’s Nikkei 225 rose 0.2%, while the broader TOPIX gained 0.4%, trimming some earlier advances after the central bank’s decision.
The BOJ kept its policy rate at 0.75% in a near-unanimous vote and upgraded its growth and inflation outlook for fiscal 2025 and 2026, citing support from higher government spending. In its statement, the central bank reiterated that further rate hikes will come as growth and wages strengthen.
Markets expect the BOJ to remain on hold until at least March or April, when spring wage negotiations provide clearer signals on income trends. Earlier data showed headline inflation easing to a near four-year low in December, although underlying price pressures remain sticky.
Regional Markets Mixed for the Week
Technology shares led Friday’s gains across the region, helped by upbeat commentary from NVIDIA that revived optimism around artificial intelligence.
South Korea’s KOSPI climbed 0.6% and traded just below record highs, extending its position as Asia’s top performer this week with a 2.5% gain, driven by strength in chipmakers and automakers.
China’s CSI 300 and Shanghai Composite moved in tight ranges, while Hong Kong’s Hang Seng added 0.4%. Australia’s ASX 200 rose 0.3%, and Singapore’s Straits Times Index advanced 0.9%.
India’s Nifty 50 slipped 0.1% in morning trade and remained the region’s laggard, down about 1.6% for the week. Investor caution persisted amid an elusive U.S. India trade deal and a run of weak corporate earnings from major Indian firms.
Overall, while Friday’s session brought relief, Asian markets continued to grapple with a volatile week shaped by geopolitics, fiscal concerns and shifting global policy expectations.
