Nikkei jumps to 7-year high after BOJ shocks by easing further

viernes 31 de octubre de 2014 01:59 GYT
 

* Weak yen drives exporter shares higher
    * Abe may use strong market performance as ammunition to
stick to initial tax hike plan - traders

    By Ayai Tomisawa
    TOKYO, Oct 31 (Reuters) - Japanese stocks rocketed more than
5 percent to levels before the global financial crisis on
Friday, after the Bank of Japan stunned markets by easing policy
further in a move prompted by slow inflation after an April tax
hike dented economic growth.
    The central bank decided to increase the pace at which it
expands base money to about 80 trillion yen per year, up from a
previous target of 60-70 trillion yen. 
    The BOJ also decided to increase its purchases of government
debt by about 30 trillion yen and extend the average duration of
JGB holdings to around 10 years, and decided to triple its
purchases of exchange-traded funds and Japan real estate
investment trusts.
    The Nikkei benchmark rose 5.1 percent to 16,455.84
in mid-afternoon trade, the highest level since November 2007.  
    "Most people thought that easing would start in January, and
only a handful people thought that they would do some easing in
October," said a senior trader at a foreign brokerage. "It's
definitely a surprise."
     The Japanese economy has been plagued by weak consumption
after the government raised the consumption tax in April,
prompting government ministers to call on Prime Minister Shinzo
Abe to delay a planned second consumption tax increase next
year.
    But the senior trader said that Abe may use the strong stock
market performance as ammunition to stick to the initial plan.
    The dollar soared to a near seven-year high above 110.67 yen
, lifting exporters. Toyota Motor Corp jumped 3.7
percent, Honda Motor Co and Tokyo Electron Ltd 
soared 3.8 percent.
    The broader Topix gained 3.7 percent to 1,326.17,
while the JPX-Nikkei Index 400 surged 3.9 percent to
12,099.14.