Bank of Japan Expands Asset Program, Nikkei Falls 1.2%

Nigel Thomas
20 Dec, 2012
New York City

Investors turned cautious and sold stocks and Bank of Japan expanded its asset purchase program but left it inflation target at 1%. The latest central bank action was widely anticipated.

[R]7:00 PM Tokyo – Investors turned cautious and sold stocks and Bank of Japan expanded its asset purchase program but left it inflation target at 1%. The latest central bank action was widely anticipated.[/R]

Nikkei index in Tokyo traded lower after investors focused on the long term impact of the latest central bank action. The move to expand asset purchase program was widely anticipated after the latest general election results.

Bank of Japan expanded its asset purchase program by 10 trillion yen to 76 trillion yen or $903 billion but left its credit program at 25 trillion yen. Total stimulus program was increased to 101 trillion yen, by a unanimous vote.

The central bank said it will review its inflation target of 1% after the recently re-elected LDP leader Shinzo Abe called for the inflation target of 2%.

The Nikkei 225 Stock Average dropped 121.07 or 1.2% to 10,039.33 and the broader Topix Index slipped 0.73 to 838.61.

The yen edged lower and closed at 84.28 against one dollar, traded near a 20-mnth low.

Stocks in Review

Kansai Electric Power advanced 18 yen to 922 yen and Tokyo Electric Power Co gained 3 yen to 233 yen. Shikoku Electric soared 99 yen or 7.7% to 1,386 yen and Chubu Electric Power Co slid 2 yen to 1,157 yen.

Toyota Motor Corp. jumped 30 yen to 3,880 yen and Honda Motor Co. dropped 55 yen to 3,015 yen and Nissan Motor Co Ltd plunged 62 yen or 7.3% to 782 yen. Mazda Motor Corp closed unchanged at 150 yen. Isuzu Motors Ltd slipped 3 yen to 487 yen.

Nippon Steel up 1 yen to 209 yen and JFE Holdings Inc decreased 6 yen to 1,514 yen. Tokyo Steel Manufacturing surged 19 yen or 5.2% to 384 yen.

All Nippon Airways slid 1 yen to 176 yen and. JAL slipped 10 yen to 3,685 yen.

Fujikura Ltd lowered 1 yen to 252 yen and TDK declined 60 yen to 3,100 yen. Murata Manufacturing Co increased 20 yen to 4,870 yen and Meiko Electronics Co Ltd gained 3.8% or 691 yen.

Shimano Inc increased 10 yen to 5,700 yen.

Oki Electric Industry up 1 yen to 94 yen, Ricoh Co Ltd dropped 35 yen to 936 yen, Sony Corp decreased 15 yen to 921 and Seiko Epson Corp soared 31 yen or 5.2% to 629 yen.

Canon Inc declined 100 yen to 3,355 yen and Nikon plummeted 74 yen to 2,449 yen.

Olympus Corp. gained 11 yen to 1,543 yen and Nintendo Co. Ltd slumped 220 yen to 8,750 yen, Fujitsu up 3 yen to 347 yen and Pioneer Corp. decreased 5 yen to 225 yen.

Sharp Corp slipped 5 yen to 302 yen. Panasonic Corp increased 7 yen to 508 yen.

Fanuc Corp. dropped 330 yen to 15,070 yen and Komatsu Ltd decreased 12 yen to 2,094 yen. Hitachi Construction Machinery Co slipped 4 yen to 1,684 yen.

Sumitomo Heavy gained 3 yen to 392 yen.

FamilyMart Co Ltd, the convenience chain operator increased 10 yen to 3,570 yen and Lawson climbed 50 yen to 5,780 yen. Ito En Ltd added 8 yen to 1,587 yen.

Seven & I Holdings Co increased 2 yen to 2,410 yen.

Fast Retailing Co. declined 860 yen to 20,370 yen and J. Front Retailing Co. Ltd slipped 8 yen to 430 yen.

Mitsubishi UFJ Financial Group gained 5 yen to 440 yen and Sumitomo Mitsui Financial Group climbed 25 yen to 3,035 yen. Nomura Holdings, Inc increased 9 yen to 429 yen.

Mitsui O.S.K. Lines, Ltd slid 2 yen to 227 yen and Nippon Yusen K.K. added 1 yen to 189 yen.