A currency dealer monitors exchange rates in a trading room at KEB Hana Bank in Seoul on June 21, 2021.

JUNG YEON-JE | AFP via Getty Images

SINGAPORE — Asia-Pacific markets traded mixed on Friday, following overnight losses on Wall Street, as investors assessed monetary policy decisions from two key central banks.

Japan’s Nikkei 225 fell 0.68% in early trade while the Topix index slid 0.33%. South Korea’s Kospi was down 0.19%.

In Australia, shares bucked the downward trend with the benchmark ASX 200 gaining 0.55%.

Friday’s session follows overnight declines on Wall Street where weakness among large tech stocks dragged down major market averages.

Central banks in focus

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Decisions from Bank of England and European Central Bank followed after earlier in the week, the U.S. Federal Reserve said it will accelerate the reduction of its monthly bond purchases, after which, the central bank expects to start raising interest rates.

The Bank of Japan is due to announce its monetary policy decision today and analysts say they do not expect any substantive changes.

Weak inflation expectations is one of the likely reasons that the Bank of Japan will not follow in the same direction as the Fed on Friday, Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, wrote in a Friday morning note.

“All the developed economies have faced supply bottlenecks for some products,” Capurso said.

“The sharp contrast between high US inflation and barely existent inflation in Japan suggests that supply bottlenecks are not dominating the overall inflation trend,” he said, adding, “Other factors such as a very strong demand impulse in the US compared to elsewhere, including Japan, is probably behind the US’s exceptional inflation impulse.”

Currencies and oil

In the currency market, the dollar index last traded at 96.042 against a basket of its peers, after climbing from an earlier level around 95.998.

The Japanese yen strengthened from above 114 to 113.67 against the greenback while the Australian dollar changed hands at $0.7176.

Oil prices fell on Friday during Asian trading hours. U.S. crude futures dipped 0.82% to $71.79.

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