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Asian Stocks Mixed as BOJ Holds Rates, Oil Prices and Fed Outlook Weigh on Markets

Asian Stocks Mixed as BOJ Holds Rates, Oil Prices and Fed Outlook Weigh on Markets. Source: Kakidai, CC BY-SA 4.0, via Wikimedia Commons

Asian stock markets delivered a mixed performance on Tuesday as investors reacted to elevated oil prices, ongoing geopolitical tensions, and the Bank of Japan’s decision to keep interest rates unchanged. Market sentiment remained cautious despite record highs on Wall Street, where technology stocks continued to drive gains.

The Bank of Japan held its short-term interest rate steady at 0.75% in a widely anticipated move, with a 6–3 vote backing the decision. Policymakers signaled a gradual path toward monetary tightening, noting that future rate hikes will depend on economic conditions and developments surrounding the Middle East conflict. The central bank also highlighted moderately rising inflation expectations, reinforcing the possibility of further policy adjustments later this year.

Japan’s Nikkei 225 slipped 0.7% to 60,107.50 after reaching a record high in the previous session, while the broader TOPIX index rose 0.8%, reflecting mixed investor sentiment. In contrast, South Korea’s KOSPI surged more than 1% to a fresh all-time high, outperforming regional peers.

Elsewhere in Asia, markets were subdued as rising crude oil prices continued to pressure risk appetite. Ongoing disruptions near the Strait of Hormuz, linked to the Iran conflict, have kept oil prices near multi-week highs, fueling inflation concerns across global markets. Technology stocks in the region also declined, mirroring a cautious tone ahead of key U.S. earnings reports and increased scrutiny over artificial intelligence valuations.

A Wall Street Journal report indicating that OpenAI missed internal revenue and user growth targets ahead of a potential IPO added to uncertainty in the AI sector. Meanwhile, China’s Shanghai Composite dipped 0.1%, Hong Kong’s Hang Seng fell 0.7%, and Australia’s S&P/ASX 200 declined 0.5%. Singapore’s Straits Times Index edged up slightly, while India’s Nifty 50 futures pointed lower.

Global investors are now closely watching the U.S. Federal Reserve’s upcoming policy decision, which is expected to provide further direction for financial markets.

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