BoJ Left Bond Purchase Plan Intact and Lifted Inflation Expectation Outlook

Hiruki Nakamura
20 Dec, 2013
New York City

Stocks in Japan closed higher and extended weekly gain to 3% and the yen eased and fell below 104 against one dollar. Bank of Japan kept its plan to expand monetary base intact and said inflation expectations are rising.

[R]4:30 PM Tokyo – Stocks in Japan closed higher and extended weekly gain to 3% and the yen eased and fell below 104 against one dollar. Bank of Japan kept its plan to expand monetary base intact and said inflation expectations are rising.[/R]

Stocks in Tokyo increased and extended gains in the week after the Bank of Japan maintained its record easing following the U.S. Federal Reserve announcement to taper its bond buying program from January.

The policy makers and Governor Haruhiko Kuroda maintained the plan to expand monetary base by an annual 60 trillion yen to 70 trillion yen and keep the inflation target of 25.

The central bank said in a statement, core consumer prices increase expectations are expected to be around 1%, higher than its previous estimate between 0.5% and 1% in the statement a month ago.

The Nikkei 225 Stock Average rose 11.20 to 15,870.42 and the Topix slid 1.43 to 1,261.64. For the week, Nikkei 225 climbed 3%.

The yen fell 0.2% to 104.34 against one dollar and extended its slide against the dollar by 17% in the year so far.

Stocks in Review

Toyota Motor Corp fell 30 yen to 6,170 yen.

Honda Motor Co increased 40 yen to 4,300 yen and the automaker said that it is scheduled to launch VEZEL model in Japan today.

Honda also launched its new model Fit, the third generation subcompact, production at its new plant in Mexico.

Nissan Motor Co Ltd dropped 21 yen to 871 yen.

Sony rose 7 yen to 1,827 yen.

Softbank Corp slid 10 yen to 8,920 yen. Fast Retailing Co soared 1,100 yen or 2.7% to 41,850 yen.

Mitsubishi Heavy Industries, Ltd fell 0.3% to 633 yen after the company received an order to supply Sri Lanka''s first highway traffic management system. The system is scheduled to go live by the end of 2014.

Panasonic Corporation rose 0.2% to 1,215 and the company signed a joint venture agreement with the U.S.-based TowerJazz.

Panasonic will contribute three semiconductor plants in the joint venture for 51% stake in the venture.

Tokyo Electric Power Co Inc dropped 2.1% to 522 yen after the government offered to increase the interest-free loans through the state-backed Nuclear Damage Liability Facilitation Fund to 9 trillion yen or $87 billion from 5 trillion yen, according to the fiscal 2014 budget.