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Japan Equities Reach 34-year Highs as BOJ Remains Unchanged

As the Bank of Japan maintained its ultra-loose monetary policy, Japanese shares shot to new 34-year highs. Meanwhile, Chinese markets suffered as investors concerned about the fragile economy were unimpressed by rumors of a massive rescue package from Beijing.

Opening relatively flat, European markets are expected to see a 0.1% increase in EUROSTOXX 50 futures. While Nasdaq futures increased by 0.1%, S&P 500 futures remained unchanged. Although profit-taking ultimately reduced the Nikkei’s early gains, the index is still up 9% so far this year. Hong Kong’s Hang Seng index saw a 2.9% increase, which helped the MSCI’s broadest index of Asia-Pacific equities outside of Japan rise by 0.9%.

China’s cabinet promised late on Monday to support market confidence with more decisive and effective actions. A recent news article stating that authorities were looking to raise roughly 2 trillion yuan ($278 billion) to stabilize the nation’s collapsing stock markets helped to improve confidence even more. The second-biggest economy in the world is dealing with a number of issues, such as a worsening housing crisis and weak demand that is causing deflationary pressures, which have recently affected the stock market.

Chinese blue-chip stocks fluctuated between gains and losses; they were recently up a small 0.2%, not too far from five-year lows that were reached only this past Monday. Will the rescue package be sufficient to turn the ship around? is a question that keeps coming up in reports about it. Additionally, preliminary market responses indicate that traders are unimpressed “said City Index senior market analyst Matt Simpson.

“The National Team have likely been supporting the market already, and whilst that may have deterred bears it hasn’t really enticed bulls from the sideline.”As anticipated, the Bank of Japan maintained its record low interest rates on Tuesday. Although it revised up its projection for fiscal 2025 to 1.8% from 1.7%, it downgraded its prognosis for near-term inflation.

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