On Tuesday, Asian stocks dropped before a long-awaited decision of Japan’s central bank. Japanese Nikkei Stock Average closed -0.1%, Australian S&P/ASX 200 ended up -1.2% and only Korean Kospi remained flat.
Meanwhile, the Shanghai Composite Index boasted -0.2%, the Hang Seng Index in Hong Kong dipped 0.5%.
Market participants were waiting for the BOJ to unveil whether it would adjust its recently introduced minus rate or not. Financial analysts most expect the BOJ to keep its rate unchanged. Later on Tuesday, Haruhiko Kuroda, the BOJ’s governor, is expected to speak at a press conference about the future of the country’s monetary policy.
This morning, the Tokyo Stock Price Index, also dubbed Topix, dived 3.5% compared to the previous close on January 29. Bank stocks negatively reacted to growing concerns that low rates would apply pressure on bank’s net interest margins. As a result, a Topix subindex for banks lost 9.7%.
Traders also put a lot of value on long-term Japanese government debt, as they hop for positive yields. By the way, last week the yield on Japanese benchmark ten-year government bond sagged to its record low.