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Dovish BOJ boosts Japan stocks, China shares fall after benchmark lending rates left unchanged

Shreyashi Sanyal

This is CNBC's live blog covering Asia-Pacific markets.

A man looks at an electronic quotation board displaying stock prices on the Tokyo Stock Exchange in Tokyo on August 2, 2022.
Kazuhiro Nogi | AFP | Getty Images

Asia markets rose Wednesday, with Japan stocks extending gains to another session after the country's central bank left its ultra-loose monetary policy unchanged at its final meeting this year.

The Bank of Japan kept interest rates at -0.1%, while sticking to its yield curve control policy that keeps the upper limit for 10-year Japanese government bond yield at 1% as a reference. BOJ Governor Kazuo Ueda also struck a dovish tone at a press conference after the policy decision.

The yen, steadied against the dollar, last up 0.08% at 143.71.

The People's Bank of China held its one-year loan prime rate — the peg for most household and corporate loans in the country — at 3.45%. The five-year benchmark loan rate — the peg for most mortgages — was unchanged at  4.2%.

Optimism also spilt over from a rally on Wall Street, which saw the S&P 500 edging close to a record high and the blue-chip Dow Jones Industrial Average recording its ninth straight day of gains.

In Australia, the S&P/ASX 200 ended the session 0.65% higher at 7,537.90, hitting a 10-month high.

Hong Kong's Hang Seng index gained 0.56%, while China's CSI 300 was the only large market in Asia that fell, closing 1.1% lower at 3,297.50.

Japan's Nikkei 225 closed 1.37% higher at 33,675.94, while the broader Topix was 0.67% higher at 2,349.38.

South Korea's Kospi rose 1.78% to end at 2,614.30, gaining the most among Asia-Pacific markets and the small-cap Kosdaq added 0.55% at 862.98.


Overnight, Wall Street's benchmark S&P 500 index rose Tuesday, approaching its record high, as the Federal Reserve's recent dovish shift on rates lifted stocks.

The broad market index gained 0.59% to 4,768.37. With Tuesday's gain, the S&P 500 is about 0.6% from surpassing its record close and 1% from equaling its intraday record, both set in January 2022.

The Dow Jones Industrial Average rose 251.90 points, or 0.68%, to 37,557.92. The Nasdaq Composite advanced 0.66% to 15,003.22. It was the first time the tech-heavy index closed above the 15,000 level since January 2022.

— CNBC's Clement Tan, Sarah Min and Samantha Subin contributed to this report

Alibaba slashes stake in Xpeng for second time this month, shares rise

Chinese ecommerce giant Alibaba slashed its stake in electric-vehicle maker Xpeng, according to a company filing.

Alibaba's Hong Kong-listed shares rose 3% in morning trade. Xpeng shares climbed 0.44%.

As of Dec. 15, Alibaba had a 9.2% stake in Xpeng, compared with 12.5% more than a week ago.

Alibaba is one of the top three stakeholders of Xpeng, according to LSEG data.

— Shreyashi Sanyal

China leaves benchmark lending rates unchanged for December

BEIJING, CHINA - JUNE 13: A woman walks past the People's Bank of China (PBOC) building on June 13, 2023 in Beijing, China.
China News Service | China News Service | Getty Images

China's central bank held its one-year and five-year loan prime rates at 3.45% and 4.2% for December, according to a release by the People's Bank of China.

This is the fourth straight month that the PBOC held the one-year LPR after lowering it from 3.55% to 3.45% in August.

The five-year LPR, meanwhile, has been held at 4.2% for six consecutive months, having been last lowered in June from 4.3%.

China's CSI 300 index opened 0.1% lower after closing flat in the previous session.

— Shreyashi Sanyal

Aussie stocks hit 10-month highs, dollar flat

Asia-Pacific markets were largely higher on Wednesday, with stocks in Australia hitting their highest level in 10 months.

The the S&P/ASX 200 rose 0.6% to 7,534 to touch its highest since Feb. 7. The index has fallen in just two session over the last two weeks.

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The Reserve Bank of Australia held interest rates steady at its last meeting of the year earlier this month, with markets now no longer pricing in a possible of rate hike, partly driven by the Federal Reserve's more dovish tilt.

Minutes from that meeting showed on Tuesday that the Australian central bank deliberated on whether to raise rates by 25 basis points or leave them unchanged, with the board members eventually deciding to hold them at 4.35%.

"The minutes state the board once again debated the case to raise the cash rate or leave policy on hold.  We believe the decision to leave the cash rate unchanged in December was straight forward,"  analysts at CBA wrote in a client note.

"We remain comfortable with our base case for an easing cycle to commence in September 2024."

The Australian dollar was largely flat against the U.S. dollar.

— Shreyashi Sanyal

CNBC Pro: Want to play higher oil prices? Strategist names a favorite stock — and analysts give it 33% upside

It hasn't been a good year for energy stocks — the only sector left out of November's stock market rally.

And its outlook for 2024 looks similarly underwhelming: the International Energy Agency expects the slowdown to continue next year.

But one portfolio specialist is bullish on the sector's long-term prospects.

"We've been more constructive on energy than we were in the last year," Rahul Ghosh, equity portfolio specialist at investment firm T. Rowe Price told CNBC Pro, naming one under-the-radar stock to play the theme.

Pro

— Amala Balakrishner

Oil prices rise as traders worry about Red Sea disruption

Oil prices on Tuesday rose more than 1% as traders worry about disruption to shipping through the Red Sea as militants based in Yemen attack vessels.

The West Texas Intermediate contract for January rose 97 cents, or 1.34%, to settle at $73.44 a barrel. The Brent contract for February gained $1.28, or 1.64%, to settle at $79.23 a barrel.

BP announced on Monday that it was pausing shipping through the Suez Canal over safety concerns as Houthi militants attack vessels. The U.S. is expanding a multinational maritime force to protect vessels from attack.

— Spencer Kimball

Cash pouring into SPY could be a sign of 'get me in' behavior, BTIG says

The massive amount of cash moving in to the SPDR S&P 500 Trust (SPY) could be a signal the investor behavior is changing, according to BTIG technical strategist Jonathan Krinsky.

The ETF reported inflows of more than $20 billion on Monday, according to FactSet, and some data sources suggest it will report another sizeable investment for Tuesday. Krinsky said in a note to clients that there may be a connection between the stock market flirting with new record highs and the moves.

"While we can't say there is a clear correlation between significant inflows and performance, that size is notable and perhaps speaks to a 'get me in' mentality?," the note said.

Not all stock index funds are seeing the same demand, however. For example, the iShares Core S&P 500 ETF (IVV) reported nearly $9 billion in outflows on Monday.

— Jesse Pound

K-pop shares rise, JYP Entertainment leads gains

The KPOP and Korean Entertainment ETF (KPOP) outperformed Tuesday, rising 2% after record label conglomerate JYP Entertainment announced a new boy band NEXZ.

JYP Entertainment shares gained about 8%, on pace for its best day since July 25, 2023 when the stock gained 9.38%.

— Sarah Min, Gina Francolla