BoJ Reaffirms Bond Program, Panel Suggests Japan Pension Asset Diversification

Hiruki Nakamura
21 Nov, 2013
New York City

A panel of experts suggested $1.2 trillion government pension fund to diversify into broader and riskier assets from domestic bonds. Market indexes rebounded nearly 2% after the recommendation. Bank of Japan reaffirmed its bond purchase program.

[R]4:30 PM Tokyo – A panel of experts suggested $1.2 trillion government pension fund to diversify into broader and riskier assets from domestic bonds. Market indexes rebounded nearly 2% after the recommendation. Bank of Japan reaffirmed its bond purchase program.[/R]

Market indexes in Tokyo jumped after falling for two days in a row after investors focused on a recommendation by a panel of experts to invest more in riskier assets in government controlled pension fund.

The panel suggested that the $1.2 trillion pension fund should diversify into riskier assets including commodities, alternative assets and private equity.

In addition, the Bank of Japan left its monetary policy unchanged today and kept its pledge to expand its monetary base between 60 trillion yen and 70 trillion (between $600 billion and $700 billion) yen a year.

The Nikkei 225 Stock Average jumped 289.52 or 1.9% to 15,365.60 and the Topix gained 12.88 to 1,246.31.

The yen fell to 100.75 against one dollar, the lowest since July 19 and the currency eased against the euro, pound and Australian and Singapore dollar.

Stocks in Review

Toyota Motor Corp fell 10 yen to 6,280 yen.

Honda Motor Co. jumped 140 yen to 4,240 yen and Chief Operating Officer for Regional Sales Operations in Japan Sho Minekawa said N-BOX was best selling mini-vehicle in Japan for fiscal 2013 and for the first-half ending in September.

Nissan Motor Co Ltd rose 5 yen to 928 yen and the automaker said the company is ready launch its light commercial vehicle in mid-2014 in Europe and in Japan in fiscal 2014.

Sony gained 26 yen to 1,894 yen and the company confirmed some of the PS4 game console for sale in North America last week was reportedly damaged during shipping but spokesperson Satoshi Nakajima said malfunction rate for the machines is below 1%.

Softbank Corp climbed 240 yen or 3.1% to 7,970 yen. Fast Retailing Co. soared 1,300 yen or 3.6% to 37,100 yen.

Astellas Pharma Inc slid 0.6% to 6,080 yen and the U.S. regulators warned about rare but potentially fatal risk from two chemicals sold by the company during cardiovascular stress tests.

Sharp Corporation fell 0.7% to 297 yen and the electronic equipment maker reassess the partnership with Taiwan-based Hon Hai Precision Industry Co to develop and sell smart-phones under the Sharp brand in China.