Nikkei hits 8-month peak after central bank maintained its ‎stimulus policy

Japan’s Nikkei rose to an eight-month high on Friday after the Bank of Japan kept its ultra-easy monetary policy unchanged, boosting the index further after a series of strong corporate earnings boosted it.

According to “Reuters”, the Nikkei index rose to 28,879.24 points for the first time since August 19, and closed near this level at 28,856.44 points, up 1.4 percent.

The broader Topix index closed up 1.23 percent to 2,057.48 points, the strongest level since March 9.

Yen fell 0.83 percent to just over 135 against the dollar, which supported shares of Japanese exporters, especially automakers.

Despite this, bank shares were a victim of the Bank of Japan’s decision, as it turned from gains of 2.64 percent in the morning to losses of 2.41 percent, as low interest rates will continue to crush lending profits for the foreseeable future.

As was widely expected, the Bank of Japan kept the target level for short-term interest rates unchanged at -0.1% and for the 10-year bond yield at almost zero, and pledged to continue stimulus “patiently”.

He announced a “broad” review of his monetary policy, which may last a year and a half, which indicates a lack of haste in changing policies.

“The main message is that the Bank of Japan will of course consider changing monetary policy, but it will take longer… This has led to some volatility in financial markets,” said Masayuki Kichikawa, senior macro analyst at Sumitomo Mitsui Asset Management.

The banking index recorded the worst performance among the 33 sub-indices on the Tokyo Stock Exchange, but its losses declined significantly, to only 0.28 percent at the close.

Shares of transportation equipment companies rose 2.19 percent

The gainers exceeded the losers on the Nikkei index, as 205 rose out of 225 shares, compared to a decrease of 20.