Nikkei Surges 1.2%, BoJ Expands Asset Purchase Program

Nigel Thomas
19 Sep, 2012
New York City

Stocks in Tokyo surged after the Bank of Japan expanded its asset purchase program to provide additional liquidity and inflate asset prices. Several large Japanese companies resumed production and reopened stores after anti-Japanese protests subside.

[R]7:00 PM Tokyo – Stocks in Tokyo surged after the Bank of Japan expanded its asset purchase program to provide additional liquidity and inflate asset prices. Several large Japanese companies resumed production and reopened stores after anti-Japanese protests subside.[/R]

Stocks turned higher and the benchmark index in Tokyo closed higher 1.2% after the Bank of Japan expanded its asset purchase program in a surprise move.

In what appears to be a coordinated move with other central banks in the U.S. and Europe, the Bank of Japan expanded its asset purchase plan by 10 trillion yen or $127.12 billion.

The total asset purchase program will increase to 55 trillion yen or $695 billion from 45 trillion yen. In addition, a separate fund provides credit to banks of at 25 trillion yen.

The move underscores the fact that the world economic growth remains vulnerable and actions of central bank can only help so much to support domestic consumption and help exporters.

Central banks around the world are taking steps to inflate the asset prices and the latest move by the Bank of Japan lifted market indexes in trading today. Bank of Japan moved to expand asset purchase program in February and since then the benchmark index in Tokyo surged as much as 10% in the next five weeks and weakened the yen more than 6%.

The Nikkei 225 Stock Average climbed 108.44 or 1.2% to 9,232.21 and the broader Topix Index increased 6.44 or 0.9% to 764.80.

Stocks in Review

Several Japanese companies announced plans to resume factory production and open stores as anti-Japanese protest subside.

Mitsui O.S.K. Lines, Ltd soared 14 yen or 6.9% to 217 yen and Kawasaki Kisen Kaisha, Ltd surged 12 yen or 11.8% to 114 yen and Nippon Yusen K.K. climbed 9 yen or 6% to 159 yen.

Toyota Motor increased 60 yen or 1.9% to 3,255 yen, Honda Motor Co. climbed 70 yen to 2,674 yen and Nissan Motor Co Ltd gained 26 yen or 3.7% to 727 yen and said it will resume production at four plants in China.

Nippon Steel up 1 yen to 176 yen and JFE Holdings Inc increased 24 yen to 1,180 yen. Tokyo Steel Manufacturing closed unchanged at 293 yen.

TDK jumped 155 yen or 5% to 3,240 yen, Murata Manufacturing Co added 0.5% to 4,340 yen and Meiko Electronics Co Ltd gained 0.4%. Foster Electric and Sumida Corp are increased 1.3% respectively.

Canon Inc jumped 49 yen to 2,861 yen and Seiko Epson Corp climbed 22 yen or 4% to 568 yen and Ricoh Co Ltd advanced 33 yen or 4.8% to 716 yen. Sony Corp gained 28 yen to 1,055.

Panasonic Corp increased 15 yen to 575 yen, Nikon advanced 15 yen to 2,157 yen and Toshiba Corp, gained 10 yen to 276 yen.

Olympus slipped 1.7% to 1,514 yen, Nintendo Co. Ltd climbed 70 yen to 10,090 yen, Fujitsu jumped 4.3% to 314 yen and Pioneer Corp. up 1 yen to 250 yen. Sharp Corp slid 3 yen to 200 yen.

Fanuc Corp. climbed 100 yen to 13,990 yen and Komatsu Ltd increased 20 yen to 1,670 yen. Hitachi Construction Machinery Co gained 24 yen to 1,368 yen.

FamilyMart Co Ltd, the convenience chain operator slipped 20 yen to 3,645 yen and Lawson climbed 50 yen to 5,650 yen. Ito En Ltd added 1 yen to 1,560 yen.

Seven & I Holdings Co jumped 39 yen to 2,330 yen.

Yamada Denki climbed 140 yen or 4.1% to 3,575 yen. Nitori Holdings Co slumped 40 cents to 7,850 yen, apparel retailer Shimamura gained 40 yen to 9,040 yen and Sagami Co closed unchanged at 119 yen.

Fast Retailing Co. advanced 570 yen to 18,050 yen after the casual apparel retailer said it opened most of its 40 stores in China. J. Front Retailing Co. Ltd increased 5 yen to 432 yen.

Kajima Corp slid 3 yen to 213 yen and Taisei Corp added 6 yen to 219 yen. Sekisui House Ltd lowered 3 yen to 779 yen and Daito Trust Construction Co Ltd slipped 10 yen to 7,750 yen.

Credit Saison Co Ltd increased 13 yen to 1,868 yen.

Tokyo Tatemono Co., Ltd gained 10 yen to 294 yen and Mitsui Fudosan advanced 14 yen to 1,611 yen and Sumitomo Realty & Development Co. climbed 32 yen to 2,140 yen.

Inpex Corp down 0.5% to 496,500 yen and Japan Petroleum Exploration Co. slumped 55 yen to 3,230 yen. Tokyo Electric Power Company, Inc. added 1 yen to 134 yen.

Mitsubishi UFJ Financial Group slid 1 yen to 388 yen and Sumitomo Mitsui Financial Group jumped 20 yen to 2,603 yen. Nomura Holdings, Inc gained 4 yen to 305 yen.

Tokio Marine climbed 21 yen to 2,114 yen and Mito Securities soared 8 yen or 5.2% to 161 yen.