BLBG:Japanese Stocks Decline as Yen Gains After BOJ Decision
Japanese stocks fell as the yen strengthened after the Bank of Japan (8301) doubled its inflation target while waiting until next year to start open-ended asset purchases like the ones already adopted by the Federal Reserve.
Exporters Honda Motor Co. and Canon Inc. fell more than 1.6 percent as the currency climbed. Sumitomo Mitsui Financial Group Inc. dropped 1.4 percent to lead declines among Japan’s biggest lenders. Kirin Holdings Co. climbed 3.2 percent after a report the beverage maker may sell its stake in Singapore-based Fraser & Neave Ltd.
The Nikkei 225 Stock Average (NKY) retreated 0.4 percent to close at 10,709.93 in Tokyo after jumping as much as 1 percent immediately after the central bank’s the decision. Trading volume was 25 percent above the 30-day average. The broader Topix Index (TPX) lost 0.4 percent to 901.15. The yen gained 0.6 percent against the dollar.
“There are still a lot of skeptics,” said Stephen Corry, a Hong Kong-based chief investment strategist at LGT Group, a private bank and asset manager that oversees about $102 billion. “The big question now is will the combined fiscal and monetary stimulus work? The yen does look oversold and the Nikkei looks overbought.”‘
The BOJ doubled its inflation target to 2 percent, a result forecast by 21 of 23 economists surveyed Bloomberg News. The Bank also said it will shift next year to open-ended asset purchases like those announced by the Fed in September. Japan’s central bank said it will buy about 13 trillion yen ($145 billion) in assets per month starting next January.
The Topix, Japan’s broadest equity measure, has risen about 25 percent since elections were announced on Nov. 14 on optimism the central bank would add to stimulus amid pressure from Prime Minister Shinzo Abe’ new government.
Japan’s currency has tumbled almost 17 percent in the past year, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
