Asian shares close mostly higher as Bank of Japan holds rates

Asian shares close mostly higher as Bank of Japan holds rates

	Published : Thu, 18 Jan 2007 09:17 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Shares across the Asia-Pacific region closed mostly higher after the Bank of Japan decided not to raise interest rates, dealers said.

Tokyo shares closed higher, with investors' focus shifting back to the general prospect of higher corporate earnings, after the central bank's decision to keep rates on hold got a limited response, dealers said.

Dealers said the market had mostly factored-in the bank's decision, which had been widely expected. What investors were waiting for, they said, was the central bank's explanation of its decision.

The blue-chip Nikkei 225 Stock Average closed 109.58 points or 0.63 pct higher at 17,370.93, off a high of 17,408.62.

The broader TOPIX index of first-section issues closed 8.41 points or 0.49 pct higher at 1,715.17, off a high of 1,719.13.

Hiroichi Nishi, general manager of equities at Nikko Securities, said: 'Recent trading has revealed that investor hopes for higher share prices remain strong, despite uncertainties over interest rate outlooks.'

He added: 'There have been such hot debates over a 25-basis-point hike but, after all, it would not add much to Japan's super-low interest rates. Investors are now waiting for the Bank of Japan to confirm its view of the economic recovery and elaborate on its decision.'

In early afternoon trading, the central bank announced that its policy board had voted 6-3 to keep the overnight call rate target unchanged at 0.25 pct.

Australian shares closed up as investors bought resource and bank stocks, reversing yesterday's selling action and helping to boost sentiment for the wider market, dealers said.

They said energy stocks also rose after oil prices jumped in overnight trading on bargain-hunting.

The S&P/ASX 200 advanced 26.3 points or 0.47 pct to close at 5,672.4, just shy of Monday's record close of 5,673.8.

The key index closed below the day's high of 5,679.5 and above the low for the day at 5,650.9.

The broader All Ordinaries index rose 24.6 points to close at a fresh record close of 5,650.7, surpassing Tuesday's record close of 5,650.4.

Hong Kong shares were higher in afternoon trade, reversing morning weakness after a lackluster performance on Wall Street and mixed US economic data, dealers said.

China property stocks saw selling pressure after news that mainland authorities will begin enforcing a land appreciation tax from Feb 1, they said.

At 3.45 pm the Hang Seng Index was up 183.80 points or 0.92 pct at 20,248.37.

In mainland China, A-shares in Shanghai and Shenzhen closed mixed as the market corrected, with real estate developers and banks under pressure, dealers said.

The Shanghai A-share Index lost 23.74 points or 0.81 pct to 2,896.34 and the Shenzhen A-share Index was up 8.94 points or 1.34 pct at 673.59.

Seoul shares closed slightly higher, reversing their initial weakness, with investors relieved by the much-expected rate freeze by the Bank of Japan (BoJ), dealers said.

The market opened lower following Wall Street's overnight retreat due to fears of inflation pressures but managed to rebound as the BoJ's decision to leave rates on hold eased concerns over global liquidity tightening, they added.

The KOSPI index closed up 3.73 points or 0.27 pct at 1,383.21, off a low of 1,372.93 and a high of 1,385.22.