Asian markets saw notable gains on Wednesday, led by a rebound in Japanese stocks following remarks from a Bank of Japan (BOJ) official that downplayed the likelihood of an immediate interest rate hike.
The Nikkei 225 reversed earlier losses, climbing 3% after initially falling 2.5% earlier in the day. The recovery followed comments from Shinichi Uchida, deputy governor of the BOJ, who suggested that recent market volatility could influence the central bank’s rate hike decisions.
Across the region, South Korea’s Kospi increased by 2.4%, Hong Kong’s Hang Seng index rose 1.3%, and Taiwan’s Taiex surged 3.8%. These gains come after a turbulent period, including the Nikkei’s largest daily drop since 1987 on Monday.
Uchida’s remarks, which indicated that the BOJ would avoid raising rates amid financial instability, contrasted with the recent more aggressive stance of the central bank. He emphasized that current monetary easing should be maintained given the volatility in financial markets. This dovish tone eased concerns and influenced market sentiment positively.
The US dollar saw a more than 2% rise against the yen, reaching 147.77, reversing recent trends where the yen had strengthened. This change highlights the impact of BOJ’s policy stance on currency movements and market dynamics.
Japan’s broader Topix index also enjoyed a significant uptick, trading more than 4% higher as the session progressed. In the US, the Dow Jones closed up 0.8%, while the S&P 500 and Nasdaq each gained approximately 1% on Tuesday.
