By Kosaku Narioka

Japanese real-estate stocks rose sharply after the country's central bank ended negative interest rates, saying a new era of stable inflation is in sight.

Shares of Sumitomo Realty & Development and Mitsubishi Estate advanced 8.3% and 5.3%, respectively, while units of real-estate investment trust Nippon Building Fund climbed 4.5% on Tuesday.

Real-estate stocks had underperformed the broader market in recent weeks in anticipation of the central bank's rate increase.

The Bank of Japan ended negative rates on Tuesday and said it will no longer buy stocks or real-estate investment trusts as it sees modest inflation taking root in the economy.

The return of inflation, backed by corporate earnings growth and wage increases, allows property owners to raise rents, helping boost the value of real estate.

Japan's largest labor union said last week that major companies plan to raise pay by an average of 5.28% this year, the biggest increase since 1991.

Meanwhile, the central bank said Tuesday that it will continue buying government bonds, keeping borrowing costs low.

The 10-year Japanese government bond yield was recently 3.0 basis points lower at 0.725%. The yield rose to a three-month high of 0.795% on Friday.

Write to Kosaku Narioka at

(END) Dow Jones Newswires

03-19-24 0248ET