World shares are mixed as Japan keeps its key interest rate unchanged

European shares were mixed after Asian markets advanced Friday as calm was restored after a tumultuous week. US futures turned lower, with the contracts for the S&P 500 and the Dow industrials down 0.1 per cent. Germany’s DAX was little changed at 24,852.07, while the CAC 40 in Paris lost 0.2 per cent to 8,129.68. Britain’s FTSE 100 edged 0.1 per cent higher.

In Asian trading, Tokyo’s Nikkei 225 picked up 0.3 per cent to 53,846.87 after the Bank of Japan kept its key interest rate unchanged, as expected. The central bank just raised the policy rate to 0.75 per cent in December. Wrapping up its policy meeting, it also slightly upgraded its estimates for future inflation and economic growth. The Japanese yen rose against the US dollar, which was trading at 158.15 yen, up from 158.42 yen.

“With underlying inflation price pressures remaining firm, we expect the Bank of Japan to resume its tightening cycle in the coming months,” Abhijit Surya of Capital Economics said in a commentary. Chinese markets also saw moderate gains.

The Hang Seng in Hong Kong added 0.5 per cent to 26,749.51, while the Shanghai Composite index was up 0.3 per cent, at 4,136.16. South Korea’s Kospi climbed 0.8 per cent to 4,990.07. The benchmark had topped 5,000 for the first time on Thursday but fell back later in the day.

In Australia, the S&P/ASX 200 edged 0.1 per cent higher to 8,860.10. Taiwan’s Taiex jumped 0.7 per cent, and the Sensex in India fell 0.9 per cent.

On Thursday, the S&P 500 climbed 0.5 per cent, extending its rally after US President Donald Trump called off tariffs on European countries that he said opposed his calls for US control of Greenland. The Dow Jones Industrial Average rose 0.6 per cent, and the Nasdaq composite gained 0.9 per cent to 23,436.02. Details were sparse about a deal on Greenland that Trump said he reached with the head of NATO, leaving investors wary of what’s to come. It’s not signed yet. It was the latest example of Trump making a big, initial threat, only to pull back after a dramatic reaction in financial markets.

The pattern has led to the “TACO” acronym, suggesting that “Trump Always Chickens Out” if markets react strongly enough. Tuesday’s drop for the US stock market was the worst since October and large enough that Trump, who often takes credit when Wall Street is doing well, acknowledged “the dip.”

JPMorgan Chase rose 0.5 per cent after a lawsuit filed by Trump against the bank caused minor ripples for its stock. Trump accused JPMorgan Chase of closing his accounts for political reasons after he left office in 2021. Treasury yields held relatively steady, suggesting foreign investors weren’t rushing out of the US bond market.

Yields got some support from reports on the US economy’s strength that came in better than expected. One said fewer US workers applied for unemployment benefits last week than economists expected, in a potential signal that the pace of layoffs remains low.

A second suggested the US economy grew at a faster rate during the summer than the government initially estimated. A third said that inflation in November was close to economists’ expectations, while spending by US consumers was a touch better than expected.

Global markets have calmed following an easing of long-term Japanese government bonds, which had spiked early in the week on worries that Japan’s Prime Minister Sanae Takaichi might make moves that would add heavily to the government’s already big debt.

The 40-year Japanese government bond yield slipped back after hitting a record of more than 4 per cent. It was trading at 3.947 per cent early Friday.