Asian equities fell Thursday after US stocks and government bonds dropped as robust economic data blurred the picture for imminent Federal Reserve rate cuts.
The yen strengthened after the Bank of Japan’s rate decision. Shares in Japan, Australia and South Korea declined, weighing on an index of the region’s equities, which headed for its worst monthly performance since August 2023.
Mainland Chinese shares were mixed and those in Hong Kong rose, as investors digested a report showing monthly Chinese manufacturing data registered its first expansionary reading since April.
The BOJ kept its benchmark interest rate unchanged after uncertainties increased over the outlook of the economy and the stability of the government after the ruling coalition suffered its worst electoral result since 2009. The yen strengthened below 153 per dollar.
“As long as we have an inflationary environment in Japan, we continue to expect BOJ to gradually raise rates next year,” Chisa Kobayashi, Japan equity strategist at UBS SuMi Trust Wealth Management, said on Bloomberg Television.
