Asian markets mostly rallied on Wednesday as U.S. Wall Street ended a four-day losing streak, while global bonds rose after the Bank of Japan widened its yield curve control tolerance.
The Nikkei 225 in Japan and the Shanghai Composite in mainland China were flat as of 9.23 A.M. (Thai time).
The Kospi in South Korea gained 0.24%. The S&P/ASX 200 in Australia rose 1.31%.
Hong Kong’s Hang Seng index rose 0.25% as Chief Executive John Lee traveled to Beijing as part of his yearly visit till Saturday to inform state leaders on the city’s economic, social, and political status.
The impact of the BOJ’s unexpected decision to allow 10-year government bond yields to trade up to 0.5%, up from a previous cap of 0.25%, is still being seen.
Traders are on high alert for the possibility of Japanese institutions repatriating funds held in foreign stocks and bonds. According to Bloomberg data, Japanese investors have more than $3 trillion in overseas shares and debt, with almost half of it in the United States.
Many economists now anticipate the BOJ to raise interest rates next year, following the Fed, the ECB, and others.