SE Asia stocks higher after BoJ overhauls monetary policy
Most Southeast Asian stock markets recovered from losses earlier in the day to end higher, echoing a surge in wider Asian stocks after the Bank of Japan said it would overhaul monetary policy and steepen the yield curve.
At a two-day rate review that ended on Wednesday, the BoJ abandoned its base money target and adopted "yield curve control" under which it will buy long-term government bonds to keep 10-year bond yields at current levels of around 0%.
Earlier, Japanese stocks rallied, with the Nikkei and the Topix indexes rising 1.9% and 2.7%, respectively, after the BoJ said 2.7 trillion yen ($26.60 billion) of its exchange traded fund purchases would be linked to the bank-heavy Topix index.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.7%.
"We expect most Asian shares to keep climbing in the short-term, and the yen to continue falling after today's announcement," said Victor Felix, an analyst with AB Capital Securities Inc.
The yen recovered from lows on Wednesday, with investors sceptical about whether the Bank of Japan's latest measures will be enough to generate inflation.
Indonesia closed 0.8% higher, buoyed by consumer discretionary and financial stocks.
Indonesia's central bank will likely cut its benchmark interest rate for the fifth time this year on Thursday to try to spur economic growth, a Reuters poll showed.
Malaysia was up slightly, with data on Wednesday showing inflation rose faster than expected in August and above the previous month's pace.
Vietnam rose 0.8% on gains in financial stocks.
Singapore was down marginally, while Philippine shares ended flat.