Asia report: Most markets fall as BoJ holds rates

28th Apr 2026 11:31

(Sharecast News) - Asia-Pacific markets closed mostly lower on Tuesday as investors assessed uncertainty around US-Iran negotiations, while oil prices rose sharply on renewed focus on the Strait of Hormuz.

"Oil extended its conflict-driven rally, with Brent up 1% above $109/bbl for a seventh straight gain and a three-week high, as markets await progress on reopening the Strait of Hormuz," said Patrick Munnelly, market strategy partner at TickMill.

"The White House said it is reviewing Iran's latest proposal but stressed that key red lines must be met to resolve the eight-week conflict."

US president Donald Trump and his national security team on Monday discussed Iran's reported offer to reopen the Strait of Hormuz, contingent on the US lifting its blockade and ending the conflict, according to White House press secretary Karoline Leavitt.

It remained unclear whether Trump, who had said sanctions relief would come only once a deal was "100% complete," was willing to consider the proposal as a pathway to de-escalation in the two-month-long conflict.

"I will confirm the president has met with his national security team this morning," Leavitt said at a press briefing Monday afternoon when asked about the reports.

"The oil move kept broader risk appetite contained: Asian equities were broadly flat, with the MSCI Asia Pacific little changed, though tech remained a bright spot as South Korea rose 1% and overtook the UK as the world's eighth-largest equity market," Munnelly said.

Tokyo falls after BoJ holds rates

Japan's Nikkei 225 fell 1.02% to 59,917.46 after notching a record high on Monday, with SoftBank Group down 9.86%, Nitto Denko losing 9.06% and Renesas Electronics dropping 6.75%.

The broader Topix rose 0.99% to 3,772.19.

The Bank of Japan kept interest rates steady at 0.75% as expected, but three of its nine board members - Naoki Tamura, Junko Nakagawa and Hajime Takata - proposed raising borrowing costs to 1.0%, the largest number of dissents since January 2016.

The central bank sharply revised up its price forecasts and warned of the risk of an inflation overshoot, strengthening expectations of a possible rate increase in coming months.

The yen rose after the decision as investors priced in the chance of a hike as soon as June.

Governor Kazuo Ueda said the bank had stood pat to assess the impact of the conflict and look through what it still regarded as a temporary supply-driven inflation shock, but added: "If inflationary risks could materialise or if they heighten significantly, we could raise interest rates on condition that downside economic risks or the risk of a sharp economic worsening are limited."

"The yen firmed after the BoJ held rates in a 6-3 split vote," Munnelly said.

"This hawkish hold kept rates unchanged, but three of the nine board members reportedly favoured a hike, a split that sharpened market conviction that the next move is still higher.

"The yen strengthened after the decision as investors interpreted the vote as a signal that policy normalisation remains live.

"Markets characterised the decision as yen-supportive, while reports noted that the BoJ also raised its inflation assessment, reinforcing the view that today's hold was tactical rather than dovish."

Munnelly added that the decision "kicks off a packed central-bank week, with the Fed, ECB, BOE and BOC also due, collectively setting policy for nearly half the global economy.

"While no major rate moves are expected, the market focus is on whether Powell, Lagarde and peers acknowledge the renewed inflation threat from higher energy prices - a key risk to equities already trading with limited breadth and heavy event risk ahead."

Japan's unemployment rate meanwhile stood at 2.7% in March on a seasonally adjusted basis, according to the Statistics Bureau, slightly above expectations and up from 2.6% the previous month.

The job-to-applicant ratio edged down to 1.18 from 1.19, meaning there were 118 job openings for every 100 job seekers.

Other regional markets mixed

Elsewhere, China's Shanghai Composite slipped 0.19% to 4,078.64, while the Shenzhen Component fell 1.1% to 14,830.46.

Shanghai Diesel Engine dropped 10.03%, Zhejiang Xinneng Photovoltaic Technology lost 10.02%, and Shanghai Porigine Chemical Material Group declined 10.01%.

Hong Kong's Hang Seng Index fell 0.95% to 25,679.78, weighed down by Contemporary Amperex Technology, which lost 6.88%, Sunny Optical Technology Group, down 6.23%, and BYD Electronic International, which fell 5.2%.

South Korea outperformed, with the Kospi 100 rising 0.37% to 7,672.69.

Posco jumped 11.74%, LG Electronics gained 7.69%, and LG Innotek added 7.65%.

South Korea's manufacturing business survey index rose to 74 in April from 71 in March, its highest reading since June 2024.

The production index held at 88, while new orders rose to 85 from 84 and inventories fell to 97 from 99.

However, the financial situation index slipped to 76 from 77, and the economic sentiment index fell 2.3 points to 91.7, pointing to softer overall confidence.

Bourses in the red down under

Australia's S&P/ASX 200 declined 0.64% to 8,710.70, with Domino's Pizza Enterprises down 10.7%, Graincorp losing 4.81% and Austal falling 4.67%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 dropped 0.86% to 12,764.40, led lower by Ryman Healthcare, which fell 4.82%, Air New Zealand, down 3.37%, and Precinct Properties New Zealand, which lost 3.33%.

Dollar strengthens on regional currencies as oil prices rise

In currencies, the dollar rose 0.1% on the yen to trade at JPY 159.58, as it gained 0.19% against the Aussie to AUD 1.3943, and advanced 0.31% on the Kiwi to change hands at NZD 1.6980.

Oil prices climbed as geopolitical risks remained in focus, with Brent crude futures last up 2.73% on ICE at $111.19 per barrel, and the NYMEX quote for West Texas Intermediate rising 3.33% to $99.58.

Reporting by Josh White for Sharecast.com.