Asia Markets

Asia markets higher as investors eye the inter-Korean Summit; Bank of Japan stays on hold

Key Points
  • Asia markets traded higher on Friday, following notable gains on Wall Street, helped by strong quarterly results from some of the biggest U.S. companies.
  • The Bank of Japan kept its monetary policy on hold, leaving short-term interest rate target at minus 0.1 percent.
  • Investors watched for developments from the inter-Korean summit, where North Korean leader Kim Jong Un met with South Korean President Moon Jae-in.
  • Oil prices rose overnight amid concerns that the United States may re-introduce sanctions on Iran, which could potentially reduce the country's oil exports.

Asia Pacific markets rose on Friday, as investors watched for developments from the Korean peninsula. North Korean leader Kim Jong Un met South Korean President Moon Jae-in at the inter-Korean Summit for talks.

That session followed after Wall Street saw gains, helped by strong quarterly results from some of the biggest U.S. companies.

In Australia, the ASX 200 gained 42.80 points, or 0.72 percent, to 5,953.6, with all sectors gaining. Energy and materials rose 0.64 percent and 0.68 percent, respectively. The heavily weighted financial sector retraced earlier losses to add 0.22 percent.

Major banking names mostly finished higher but shares of Commonwealth Bank declined 0.98 percent. ANZ added 0.23 percent, Westpac gained 0.6 percent and the National Australia Bank rose 0.42 percent.

Japan's advanced 148.26 points, or 0.66 percent, to 22,467.87 and the Topix index added 5.1 points, or 0.29 percent, to 1,777.23.

The Bank of Japan (BOJ) kept its monetary policy on hold, leaving the short-term interest rate target at minus 0.1 percent. The central bank said it will purchase Japanese government bonds so that the yield on the 10-year note will remain at around zero percent.

It removed mentions of a time-frame by which it planned to achieve its 2 percent price stability target.

In its economic activity and prices outlook report, the central bank said risks were "skewed to the downside for fiscal 2019 onward." It expects Japan's economy to expand in fiscal 2019 and fiscal 2020, supported by external demand. It said the growth pace was projected to decelerate and reflect a slowdown in domestic demand.

Two new deputy governors made their debut at the latest BOJ meeting, according to Reuters — Masayoshi Amamiya , a career central banker, and former academic Masazumi Wakatabe, a vocal advocate of aggressive easing. They both voted in favor of keeping the monetary policy on hold.

Chinese mainland markets also rose, with the composite adding 7.14 points, or 0.23 percent, to 3,082.17. The Shenzhen composite gained 5.72 points, or 0.32 percent, to 1,776.12.

In Hong Kong, the added 0.67 percent in late afternoon trade.

South Korea's Kospi trimmed early gains of more than 1 percent to add 16.76 points, or 0.68 percent, to 2,492.4.

Elsewhere, the stayed above the 91.00 level against a basket of major currencies. The dollar index traded at 91.639 as of 3:04 p.m. HK/SIN, dropping from an earlier session high of 91.670.

The Japanese yen traded at 109.27 to the greenback, weakening from an earlier level of 109.13, and the Australian dollar was at $0.7543.

The euro traded at $1.2085 on Friday afternoon Asia time, declining from an earlier high of $1.2116. Overnight, the European Central Bank held interest rates steady amid signs the euro area's growth outlook may have softened.

Oil prices rose overnight amid concerns over geopolitical developments, particularly concerns about Iran.

A top advisor to Iran's supreme leader said Tehran would not accept any change to the 2015 nuclear deal, Reuters reported. The news wire said Western signatories to the agreement were preparing a new package to persuade U.S. President Donald Trump to stick with the accord.

Trump will decide by May 12 whether to restore sanctions on Iran that could result in a reduction of Iranian oil exports, according to Reuters.

French President Emmanuel Macron said he expects the U.S. to withdraw from the Iran deal in the coming weeks. He described the reversal of American policy on international agreements, including Trump's decision to pull out of the Paris climate accord, as "insane."

On Friday afternoon Asia time, U.S. crude declined 0.22 percent to $68.03 a barrel while global benchmark Brent fell 0.35 percent to $74.48 as of 3:06 p.m. HK/SIN.

— CNBC's Tom DiChristopher contributed to this report.