SINGAPORE- Asian stocks rose on Wednesday and the yen was volatile after the Bank of Japan raised interest rates, while investors assessed contrasting results from tech bellwether Microsoft and chipmaker that suggested a divide in the AI landscape.
Oil prices rose from seven-week lows on escalating tension in the Middle East after the Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in Iran’s capital of Tehran.
The BOJ also laid out a detailed plan for quantitative tightening to pare monthly bond buying in stages, to about 3 trillion yen ($19.6 billion) by January-March 2026, as it raised its overnight call rate target to 0.25 percent from zero to 0.1 percent .
Japan’s benchmark Nikkei was down 0.19 percent in choppy trading, while the yields on Japanese government bonds inched lower after the decision.
The yen was volatile, swinging between gains and losses. It was last flat at 152.81 a dollar, but still on course for a gain of more than 5 percent in July.
The yen started the month rooted near 38-year lows of 161.96, weighed down by the wide gap between interest rates in Japan and other developed nations.
But factors such as likely official intervention, a sell-off in equities and a reassessment of popular carry trades helped the currency rebound to a 12-week high last week.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.9 percent higher, with Chinese shares soaring on Wednesday. Blue-chip stocks were up about 2 percent , while Hong Kong’s Hang Seng was also 2 percent higher.
Data showed China’s manufacturing activity shrank for a third month in July, keeping alive expectations that Beijing will need to launch more stimulus as a protracted property crisis and job insecurity hold back growth.
