SINGAPORE- Asian stocks were subdued on Wednesday and gold hovered near record highs as economic worries and a shifting geopolitical landscape kept risk appetite in check, while the yen was slightly weaker after the Bank of Japan held rates as expected.
The listless mood looks set to continue in Europe, with EUROSTOXX 50 futures 0.11 percent higher and DAX futures little changed.
The yen was last at 149.79 per dollar, a tad weaker on the day as policymakers sought to spend more time gauging how mounting economic risks from higher US tariffs could affect Japan’s fragile recovery.
Rising odds of the Japanese central bank raising interest rates have helped push the yen 5 percent higher against the dollar so far this year, with it touching a five-month high of 146.545 per dollar last week. Japan’s Nikkei was flat.
Having just raised interest rates in January, the BOJ board voted unanimously to maintain the bank’s short-term policy rate at 0.5 percent at a two-day meeting that ended on Wednesday.
Traders will parse Ueda’s comments for clues on how soon the BOJ could next raise rates, a decision complicated by the contrast between benign domestic data and uncertainty caused by US President Donald Trump’s trade policies.
“In the end, however, it is a question of ‘when’ not ‘if’ the BOJ will hike again,” said Fred Neumann, chief Asia economist at HSBC.
“The next move could come as early as June, as more evidence of wage increases trickles in. The uncertain global trade outlook, however, could even push the next BOJ rate hike well into the second half of 2025.”
The euro eased a bit but was close to the five-month high it reached on Tuesday after Germany’s parliament approved plans for a significant increase in spending, handing conservative leader and the Chancellor-in-waiting Friedrich Merz a huge boost. It last fetched $1.093175.
Geopolitical tensions escalated as Israeli airstrikes pounded Gaza and killed more than 400 people on Tuesday, shattering nearly two months of relative calm since a ceasefire began, unnerving investors.
