Japanese shares closed largely flat on Wednesday after BOJ Governor Kazuo Ueda said higher bond yields reflect market expectations for future rate hikes, signaling the central bank's willingness to adjust policy.

The Nikkei 225 rose 0.07%, or 25.98 points, to end at 36,819.09.

Speaking in parliament, Ueda said long-term rates should mainly reflect market forecasts for short-term policy rates, adding there was no major gap between the BOJ's view and market pricing.

Ueda's remarks suggest the central bank remains committed to letting market forces set yields after ending its yield control policy last year. He did not repeat a previous warning about ramping up bond buying, which briefly pushed yields lower.

In economic news, Japan's producer price index rose 4% on year in February, unchanged from January, driven by higher transportation and food costs.

The business survey index for large manufacturers fell 2.4% in the first quarter, reversing a 6.3% gain in late 2024 and missing forecasts for a 6.5% rise.

On the corporate front, Lifenet Insurance's (TYO:7157) annualized new business premium in February fell to 265 million yen from 266 million yen a year earlier, with new contracts dropping to 6,595 from 6,808.

Policies in force totaled 634,052, with an annualized premium of nearly 34 billion yen.

Marumae (TYO:6264) will acquire KM Aluminium through a special purpose company to strengthen its semiconductor position. The deal, approved on March 4, involves purchasing shares from Japan Industrial Partners and other funds.

KM Aluminium produces high-purity aluminum for semiconductor applications.

Enechange (TYO:4169) spun off its EV Charging Service unit into Miraiz Enechange on March 10, forming a joint venture with Chubu Electric Power Miraiz Co., which holds a 51% stake.

The venture aims to expand Japan's EV charging network.