Investing.com– Most Asian stocks were muted on Thursday as Japanese shares plummeted after the Bank of Japan flagged more interest rate hikes, while a rebound in Chinese markets stalled on more underwhelming business activity data.
Regional markets took little support from an overnight rally on Wall Street, where signals on a September interest rate cut from the Federal Reserve and some strong technology earnings powered sharp gains on Wall Street.
US stock index futures rose in Asian trade, with focus turning to earnings from tech giants Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) later in the day.
Nikkei 225, TOPIX plummet as BOJ flags more rate hikes
Japan’s Nikkei 225 and TOPIX indexes slid 3.1% and 3.8%, respectively, after the BOJ struck an unexpectedly hawkish tone during its Wednesday meeting.
Governor Kazuo Ueda said the bank will continue to raise interest rates after a 15 basis point hike on Wednesday, especially if the economy and inflation continue to improve in line with the BOJ’s outlook.
Japanese stocks had initially reacted positively to the BOJ meeting, given that the bank struck a somewhat dovish tone by setting a prolonged timeline for reducing its bond buying program.
But Ueda’s comments, which came after the market close, indicated that the central bank was closer to ending its decades of stimulative measures earlier than initially expected.
“If the economy and prices move in line with our projection, we will continue to raise interest rates,” Ueda said at a press conference. “We don’t see 0.5% as any key barrier when raising rates.”
