Bank of Japan keeps stimulus intact, cuts inflation outlook

BoJ is set to raise its growth forecast this week

The S&P/NZX 50 index dropped 60.31 points or 0.78 percent to 7,672.44, led down by Fletcher Building after it issued a profit warning and announced the departure of chief executive Mark Adamson.

-Germany's DAX index declined less than 0.1 percent.

Bank of Japan (BOJ) kept monetary policy unchanged and extended the timeline for achieving its 2% inflation target on Thursday. But core consumer prices in May rose just 0.4 percent from a year earlier, well below the BOJ's 2 percent target.

While the Nasdaq inched up 4.96 points or 0.1 percent to 6,390.00, the Dow dipped 28.97 points or 0.1 percent to 21,611.78 and the S&P 500 edged down 0.38 points or less than a tenth of a percent to 2,473.45. The dollar dropped, and bonds advanced.

Such efforts will raise labor productivity and could weigh on inflation, though the downward pressure exerted on prices will be temporary as Japan's potential growth heightens, it said.

The euro's jump hit stocks in the region, which erased a gain before fluctuating, and the greenback, which pared an advance as it continued to recover from Tuesday's lowest close in 11 months.

Quarterly earnings will continue to be the main focus for USA markets with analysts estimating an 8.7 percent rise in second-quarter earnings and a 4.6 percent increase in revenue for the S&P 500 companies from a year earlier, according to Thomson Reuters I/B/E/S.

With second-quarter reporting season in full swing, Qualcomm shares fell 5.1 percent after the chipmaker's forecast missed estimates. The benchmark S&P/ASX 200 index rose 29.40 points or 0.51 percent to 5,761.50 while the broader All Ordinaries index ended up 26.30 points or 0.46 percent at 5,805.70.

Currency markets were hemmed in tight ranges in early trades, with the dollar edging higher from a 10-month low tested earlier this week.

The US dollar was down 0.2 per cent against the yen after touching 111.56 yen, its weakest level against the Japanese currency since June 27.

Bucking the trend, gold miner Newcrest Mining is advancing nearly 2 percent and Evolution Mining is rising more than 1 percent after gold prices edged higher overnight.

-Gold rose 0.2 percent to $1,243.61 an ounce.

Taiwanese shares were little changed and Singapore's Straits Times index was losing 0.8 percent, while India's Sensex and Malaysia's KLSE Composite index were down around 0.1 percent each.

The Polish zloty has been one of the world's top performing currencies this year following a pick up in the country's growth, but it has faced pressure this week on the possibility of European Union action against Warsaw over a controversial judicial shake-up.

-Australia's S&P/ASX 200 index gained 0.5 percent and Japan's Topix Index rose 0.7 percent to close at its highest in almost two years.

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