Chinese stocks mixed as investors weigh on hopes of infrastructure boost

SINGAPORE — Asia-Pacific stocks were broadly higher on Thursday as investors in the region watched the market’s reaction to the Bank of Japan’s latest monetary policy decision.

Mainland Chinese stocks closed mixed, with the Shanghai Composite rising 0.58% to 2,975.48 while the Shenzhen component fell 0.225% to 10,628.92.

In Hong Kong, the Hang Seng index jumped around 1.4% in the last hour of trading.

Chinese President Xi Jinping on Tuesday called for an “all-out” effort to build infrastructure. His comments come as mainland China has been dealing with its worst Covid-19 outbreak since March since the initial shock of the pandemic in early 2020.

“What we hear from the government numbers will matter a lot more to the markets than the GDP numbers. The GDP numbers will always be backward looking as China’s economy and markets are very policy driven,” he said. Dan Fineman, co-head of Asia-Pacific equity strategy at Credit Suisse, told CNBC’s “Street Signs Asia” on Thursday.

“What we’re getting right now is, I would say, quite a reactive policy. When we see the economy weakening further, we push the government to step in with further measures to stabilize growth but… it’s more reactive than proactive and I think the markets are waiting for something stronger, more proactive,” he added.

The Bank of Japan announced on Thursday its decision to maintain its monetary policy, a decision widely expected. Japan’s central bank also said in its monetary policy statement that it “expects short-term and long-term key interest rates to remain at their current or lower levels.”

Following the announcement, the The Japanese yen weakened more than 1% to 130.25 to the dollar, from an earlier high of 128.32 against the greenback. The Japanese currency has been weakening for weeks against the dollar, with expectations that the Bank of Japan will be relatively slower to normalize monetary policy compared to peers such as the US Federal Reserve.

The Nikkei 225 in Japan led the gains among the region’s major markets on Thursday, rising 1.75% to close at 26,847.90 while the Topix index climbed 2.09% to 1,899.62.

Retail sales in Japan rose more than expected in March, according to government data released on Thursday. Retail sales rose 0.9% in March from a year earlier, above the market median, a forecast for a 0.4% rise, according to Reuters.

Elsewhere, South Korea’s Kospi advanced 1.08% to end the trading day at 2,667.49 while Australia’s S&P/ASX 200 gained 1.32% to 7,356.90.

MSCI’s broadest Asia Pacific ex-Japan equity index traded up 1.13%.

the The US dollar index, which tracks the greenback against a basket of its peers, was at 103.40 – continuing to hold above the 102 levels it broke earlier this week.

The Aussie dollar changed hands at $0.7142, above levels above $0.72 seen earlier in the week.

Oil prices were lower in the afternoon trading hours in Asia, with international benchmark Brent futures down 0.54% at $104.75 a barrel. U.S. crude futures fell 0.39% to $101.62 a barrel.

– CNBC’s Evelyn Cheng contributed to this report.