Tokyo stocks rise after BoJ holds rates steady; Middle East tensions weigh on Asia

The Tokyo Stock Exchange closed higher after the Bank of Japan unanimously decided to keep its benchmark interest rate unchanged at 0.50%. The main development was a softer stance on Japanese government bond (JGB) purchases: by a vote of 8–1, the central bank approved a less aggressive tapering plan, split into two phases until the end of the next fiscal year.

For the current fiscal year (ending March 2026), JGB purchases will be reduced by ¥400 billion per quarter; in the following fiscal year (ending March 2027), the reduction will slow to ¥200 billion per quarter.

Other Asian markets traded weakly and are set to close later today, weighed down by escalating tensions in the Middle East between Israel and Iran.

Japan’s Nikkei 225 rose 0.77%, marking a three-day winning streak, while the Shenzhen index edged up slightly to 10,176 points.