Tags: Asia | Bank of Japan | stocks | stimulus

Asian Stocks Advance as BOJ Stimulus Spurs Surge in Tokyo

Friday, 31 Oct 2014 09:21 AM

Asian stocks rose after the Bank of Japan unexpectedly boosted monetary stimulus and amid speculation that the country’s $1.2 trillion Government Pension Investment Fund will increase holdings of equities.

The MSCI Asia Pacific Index added 1.3 percent to 142.15 as of 7:40 p.m. in Hong Kong, with all 10 industry groups climbing. The gauge is heading for its biggest weekly advance since April 2013, rising 3.3 percent this week. The yen slumped 2.3 percent to 111.75 per dollar, the lowest since 2007.

Stocks began higher today after the Nikkei reported the nation’s public pension fund, the world’s largest, will today boost its allocation targets for local and foreign stocks to 25 percent each and after the U.S. economy grew faster than forecast. Shares extended gains after BOJ policy makers voted 5-4 to target a 80 trillion yen ($726 billion) annual expansion in the central bank’s monetary base.

“Today you’re getting a double boost with talk of the GPIF increasing its shares allocation and the BOJ pumping more cash in at a faster rate,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages about $125 billion, said. “It had become increasingly apparent that what the BOJ was doing wasn’t enough and they needed to do more, and it’s always been a question of when they would do that. It’s an excellent outcome.”

Japan’s Topix index surged 4.3 percent, the most since June 2013. The Nikkei 225 Stock Average soared 4.8 percent to the highest level since November 2007.

Only three of 32 economists surveyed by Bloomberg News forecast the BOJ would expand stimulus today, in what was the first policy change since Governor Haruhiko Kuroda began record asset purchases in April last year.

Hong Kong’s Hang Seng Index advanced 1.3 percent and the Shanghai Composite gained 1.2 percent. Australia’s S&P/ASX 200 Index rose 0.9 percent. South Korea’s Kospi index and New Zealand’s NZX 50 Index each added 0.3 percent. India’s S&P BSE Sensex Index rose 1.9 percent. Taiwan’s Taiex Index gained 1 percent.

The Federal Reserve this week said it will end its quantitative easing program as the world’s largest economy strengthens.

The American economy expanded at a more-than-estimated annualized rate of 3.5 percent last quarter, capping its strongest six months in a decade, a report yesterday showed. Other data yesterday showed fewer Americans filed applications for unemployment benefits over the past month than at any time in more than 14 years.

“Stronger than expected U.S. GDP growth was good enough to remind investors that the early stages of rate increase cycles are usually good times for stock markets,” said Ric Spooner, Sydney-based chief market analyst at CMC Markets Plc. “It’s providing a solid end to the trading week.”

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Asian stocks rose after the Bank of Japan unexpectedly boosted monetary stimulus and amid speculation that the country's $1.2 trillion Government Pension Investment Fund will increase holdings of equities.
Asia, Bank of Japan, stocks, stimulus
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2014-21-31
Friday, 31 Oct 2014 09:21 AM
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