SYDNEY- Japanese shares surged to fresh 34-year highs as the Bank of Japan stood pat on ultra-loose monetary policy, while Chinese stocks struggled as speculation of a huge rescue package from Beijing underwhelmed investors worried about the shaky economy.
European markets are likely to open mostly flat, with EUROSTOXX 50 futures up 0.1 percent . S&P 500 futures were flat although Nasdaq futures gained 0.1 percent .
The Nikkei’s early gains were later erased by profit-taking but the index is still up 9 percent so far this year.
The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 percent , boosted by a 2.9 percent surge in Hong Kong’s Hang Seng index
China’s cabinet pledged late on Monday to take more forceful and effective measures to support market confidence. Further lifting sentiment was a Bloomberg News report that policymakers were seeking to mobilize about 2 trillion yuan ($278 billion) to stabilize the country’s slumping stock markets.
The world’s second-biggest economy faces numerous challenges including a deepening housing crisis and sluggish demand that is fueling deflationary pressures — factors that have weighed on the stock market in recent weeks.
Chinese blue-chips wavered between gains and losses, and were last up a modest 0.2 percent , not far off from five-year lows hit just on Monday.
“Reports of the rescue package has seen an evergreen question resurface: will it be enough to turn the ship around? And early market reactions suggest traders are underwhelmed,” said Matt Simpson, senior market analyst at City Index.
“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.”
The Bank of Japan on Tuesday kept ultra-low interest rates intact in a widely expected move. It cut its near-term inflation outlook but revised up its forecast for fiscal 2025 to 1.8 percent from 1.7 percent .
Traders are focusing on any clues on how soon the BOJ will pull short-term rates out of negative territory, which is seen as the next move Ueda will take in dismantling his predecessor’s radical stimulus program.