Japan's benchmark Nikkei 225 Stock Average ended higher on Friday even as the Bank of Japan (BOJ) raised its policy interest rate to its highest level in about 31 years, said Timothy Pope, a market analyst for China Global Television Network (CGTN).
The benchmark index closed up 882.70 points, or 1.38 percent, at 65,018.95, as the central bank lifted its policy rate to 1.25 percent from 1.0 percent.
The rally was driven by a falling yen and sliding oil prices, with AI and semiconductor heavyweights pulling the market higher. Advantest and Kioxia each surged more than 7 percent, while tech investor SoftBank Group also gained.
"Over in Japan, we saw the Nikkei 225 jumping today 1.4 percent -- quite a strong gain there, as a falling yen and sliding oil prices really supported the stock market. That left the index 1.6 percent higher for the week," said Pope.
Pope noted that the rate hike had been largely priced in by investors, but the decision was not unanimous -- two BOJ board members dissented, sparking some doubt about how quickly the central bank will continue tightening. Coming into the meeting, markets had been pricing in close to two BOJ hikes by the end of the year.
But today's decision really did land more dovishly than investors had expected. BOJ Governor Kazuo Ueda didn't entirely reverse that impression either in his press conference later this afternoon. He left the door open to further hikes, and potentially even larger ones or successive moves if inflation demands it. But he also said the bank has no present timetable for rate increases and warned against over-tightening Japanese monetary policy as well," the analyst said.
Tokyo stocks end higher despite BOJ rate hike: analyst
