TOKYO – Asian shares edged higher on Friday and were on track for their biggest monthly rise since January 2012, as global central banks kept stimulative policies intact and many hinted at further steps to re-energize their economies.
That has helped soothe investors' fears of the prospect of higher borrowing costs in the United States as the Federal Reserve prepares to tighten rates, possibly by year-end.
European shares were set to open on the bright side, with financial spreadbetters expecting Britain's FTSE 100 .FTSE
to open as much as 0.3 percent higher, Germany's DAX .GDAXI
0.6 percent, and France's CAC 40 .FCHI
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent, poised to lose 2.3 percent for the week but gain more than 7 percent for October.
The Nikkei stock index .N225
slipped briefly after the Bank of Japan stood pat and then regained its composure to end up 0.8 percent at a more than two-month high, buoyed by a media report that the government is considering a supplementary budget of over $25 billion.
The Nikkei rose 1.4 percent for the week and jumped 9.7 percent for the month, the best monthly gain in two years.
The BOJ's decision to keep monetary policy steady was in line with most expectations, but some investors had speculated the central bank would deliver some additional steps to support Japan's economy. The BOJ also trimmed its price and growth forecasts on Friday, and many still expect it to eventually deliver more easing.
"The BOJ will probably wait to see whether the Fed may move in December, before deciding to ease further," said Hiromachi Shirakawa, chief economist at Credit Suisse Securities Japan.
"As such I expect further easing by the BOJ may come in January at the earliest but it will more likely to happen in April.
On Wall Street overnight, U.S. indexes posted losses but were still on track for their best monthly performance in four years. [.N]
U.S. data released overnight showed U.S. gross domestic product in July-September increased at a 1.5 percent annual rate, just shy of the consensus forecast for 1.6 percent growth and slowing from a 3.9 percent rise in the second quarter. But solid consumer spending kept alive the possibility that the Fed could deliver an interest rate increase in December.
The U.S. central bank held policy steady on Wednesday and left the door open to hike interest rates for the first time since 2006 at its Dec. 15-16 meeting.
That signal comes amid growing anxiety over a slowdown in global growth, with signs of waning momentum in China in particular stoking volatility in global markets in recent months.
Markets in China edged higher, while shares of baby goods-related companies outperformed after China's ruling Communist Party said on Thursday it would ease family planning restrictions to allow two children for all couples.
China's rate cut last week has also supported sentiment at home and aboard as Beijing steps up efforts to shore up a faltering economy.
The dollar extended losses after the BOJ policy decision, slipping to an intraday low of 120.29, and was last down about 0.1 percent at 120.99 yen JPY=
. But it was still up about 0.9 percent for the month against the backdrop of divergent monetary policy expectations.
The euro's trend was similar, with the single currency up abut 0.1 percent against the dollar at $1.0988 EUR=
but down about 1.7 percent for the month in which European Central Bank chief Mario Draghi took a surprisingly dovish stance that suggested further monetary easing steps were possible in December.
Crude oil futures slipped after the mixed U.S. economic data exacerbated fears of oversupply and as investors took profits following a rally, but they were still on track to end a volatile week with gains.
U.S. crude CLc1 was down 0.6 percent at $45.77 a barrel, but was up 2.6 percent for the week and 1.5 for the month, while Brent LCOc1 slipped about 0.4 percent to $48.59, up 1.2 percent for the week and 0.4 percent for October. –Reuters