Japan's Nikkei rises modestly after Bank of Japan keeps rates on hold; Asia markets mixed

SINGAPORE — Japan's benchmark index rose modestly on Thursday after the Bank of Japan kept rates on hold, while Asia markets were mixed.

The Nikkei 225 in Japan reversed earlier losses to close 0.44% higher at 27,803 while the Topix index was up 0.21% at 1,950.59 after the central bank's decision was announced.

In Australia, the S&P/ASX 200 gained 0.52% to 6,794.3.

Rio Tinto shares fell 2.01% after the company said it will pay the Australian Taxation Office an additional tax of 613 million Australian dollars ($422 million) over a dispute. Rio previously paid the ATO 378 million Australian dollars.

South Korea's Kospi gained 0.93% to 2,409.16 and the Kosdaq was 0.56% higher at 795.15.

Shares of automaker Hyundai Motors initially popped but closed flat after the company's earnings beat estimates. Revenue in the second quarter rose to 36 trillion Korean won ($27.4 billion), and net income jumped 55.6% from a year ago to 3 trillion Korean won.

Hong Kong's Hang Seng index slipped 1.71% in the final hour of trade, with real estate stocks pulling the index lower, while mainland China markets dropped.

The Shanghai Composite fell 0.99% to 3,272 and Shenzhen Component declined 0.94%.

MSCI's broadest index of Asia-Pacific shares outside Japan was fractionally lower.

The Bank of Japan stuck to its ultra-easy monetary policy as expected, while lowering its growth forecast for 2022 and raising its inflation predictions.

"The Bank of Japan stays a bastion of stability here," Jesper Koll, director at Monex Group Japan, said.

"In fact, the revision down in the Bank of Japan's growth projection suggests that the Bank of Japan is going to stay put for much, much longer," he told CNBC's "Street Signs Asia" on Thursday.

Japan's yen changed hands at 138.55 per dollar following the decision.

The currency has weakened considerably in recent months as Japan's easy monetary policy diverges from that of other countries.

Central banks in the region and the rest of the world have raised interest rates in a bid to keep inflation under control. The European Central Bank is expected to hike rates later Thursday.

Takuji Okubo, managing director of Japan Macro Advisors, acknowledged that there are concerns over the falling value of the yen.

"However, I think there are other ways, other policies — other than Bank of Japan's monetary policy — [that] can help ease the pain from the weak yen," he told CNBC's "Squawk Box Asia" before the decision. "[The] Japanese government can intervene directly in the exchange rate market to help support the yen."

Japan's latest consumer price index report showed that prices rose 2.1% from a year before, just above the central bank's target.

Overnight in the U.S., major averages reached their highest points since early June.

The Nasdaq Composite popped 1.58% to 11,897.65, and the S&P 500 gained 0.59% to 3,959.90. Meanwhile, the Dow Jones Industrial Average advanced 47.79 points, or 0.15%, to 31,874.84 after struggling for direction in the session.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 106.863, weaker than last week's levels.

The Australian dollar was at $0.6884, slightly lower than earlier in the week.

Oil futures fell in Asia trade. U.S. crude slipped 1.03% to $98.85 per barrel, while Brent crude dropped 0.86% to $10 per barrel.