Investing.com-- Most Asian stock markets were closed on Thursday, while Japanese shares rose after the Bank of Japan kept interest rates unchanged, as expected.

Australian stocks remained largely unchanged, with focus on trade balance data and Woolworths’ earnings report.

Trading volumes were very thin as major markets including China, Hong Kong, South Korea, Singapore, and others, were all closed for the Labor Day holiday.

Major U.S stock indexes ended with marginal moves on Tuesday, while futures tied to these indexes jumped in Asian trading on Wednesday as major corporate earnings boosted sentiment despite data showing contraction in the economy during Q1.

BOJ holds rates steady, cuts growth forecasts amid tariff woes

The Bank of Japan held interest rates unchanged at 0.5% on Thursday amid global uncertainties fueled by U.S. tariffs.

The central bank revised its economic forecasts, lowering growth projections for real GDP and inflation.

For fiscal year 2025, the real GDP growth is now expected at 0.5%, down from 1.1%.

The hold comes despite inflation remaining above the central bank’s 2% target.

The stalled US-Japan trade talks and ongoing US-China tensions remain a drag on Japan’s economic outlook, making it more difficult for the BoJ to move towards policy normalization, IG analyst said in a recent note.

BOJ Governor Kazuo Ueda will hold a press conference later in the day to explain the policy decision.

Japan’s Nikkei 225 jumped 0.8%, while TOPIX gained 0.2%.

Australia trade balance improves; RBA May rate cut bets grow

Data on Thursday showed that Australia’s trade balance grew sharply above expectations in March, as exports jumped ahead on expected U.S. tariff announcements.

A day earlier, data showed that underlying inflation fell back into the Reserve Bank of Australia’s target range of 2%-3%, supporting the case for a rate cut.

“The door is clearly open for a rate cut from the RBA in May,” ING analysts said in a note.

Australia’s S&P/ASX 200 edged 0.2% higher.

In corporate news, Australia’s largest supermarket chain, Woolworths Ltd (ASX: WOW ) reported a 3.2% rise in third-quarter sales on Thursday, despite cost-of-living pressures.

Shares of the company rose 1.5%.

US-China trade tensions remain amid conflicting signals

President Trump signed two orders on Tuesday to ease the impact of auto tariffs, offering tax credits and tariff relief on materials.

The Trump administration has also reached out to China to initiate trade talks, a Chinese state-affiliated media outlet reported Wednesday.

While President Trump has claimed that talks are ongoing, China has denied it, stoking uncertainty among investors.

Top trade adviser Jamieson Greer also said in a Fox News interview that no discussions were currently underway between the U.S. and China.