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    Japan's Nikkei Tops 13,000 For First Time Since 2008

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    Andres Pineda
    Main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62, its highest since August 2008. The Bank of Japan said on Thursday it would double the country's money supply to spur growth and halt falling prices. By pumping more money into the system, it is seen as aiming to weaken its currency and boost exports.

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    Japan's Nikkei Tops 13,000 For First Time Since 2008

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    Andres Pineda
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    Main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62, its highest since August 2008. The Bank of Japan said on Thursday it would double the country's money supply to spur growth and halt falling prices. By pumping more money into the system, it is seen as aiming to weaken its currency and boost exports.

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    Main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62, its highest since August 2008. The Bank of Japan said on Thursday it would double the country's money supply to spur growth and halt falling prices. By pumping more money into the system, it is seen as aiming to weaken its currency and boost exports.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    30 views3 pages

    Japan's Nikkei Tops 13,000 For First Time Since 2008

    Uploaded by

    Andres Pineda
    Main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62, its highest since August 2008. The Bank of Japan said on Thursday it would double the country's money supply to spur growth and halt falling prices. By pumping more money into the system, it is seen as aiming to weaken its currency and boost exports.

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    Download as DOCX, PDF, TXT or read online from Scribd
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    Japan's Nikkei tops 13,000 for first time since 2008

    The Tokyo Stock Exchange has had a strong year so far Continue reading the main story Related Stories

    Japan unveils massive stimulus plan Japanese business sentiment improves

    Japan's stock market has hit its highest level in almost five years, after a central bank stimulus plan raised hope of economic revival. The main Nikkei 225 stock index climbed as much as 4.7% to 13,225.62, its highest since August 2008. The Bank of Japan said on Thursday it would double the country's money supply to spur growth and halt falling prices. The step was much bigger than expected and signalled a more aggressive approach towards driving growth. At the same time, the Japanese yen extended losses against the US dollar on Friday, and has taken its decline to 4.5% in the past two days. By pumping more money into the system, Japan is seen as aiming to weaken its currency and boost exports.

    At the same time, it hopes to promote price growth, ending a cycle of deflation, recession and sputtering economic recovery.
    Continue reading the main story Analysis

    Mariko Oi BBC News

    Market reaction to the Bank of Japan's new stimulus measures show that Haruhiko Kuroda's bold moves were definitely more than investors expected. Some have praised Mr Kuroda - former president of the Asian Development Bank - for his understanding of how global markets and investors would react when it comes to monetary policy. The recent hype of what is known as Abenomics - Prime Minister Shinzo Abe's economic policies - may also remind many of what happened under former PM Junichiro Koizumi, whom Mr Abe served as chief cabinet secretary. Mr Koizumi promoted aggressive structural reforms which also resulted in a sharp fall in the Japanese yen. There are those who warn that at the time the weakening yen didn't help Japan's exporters longer term. And, according to the latest trade figures, exports fell 16% in February from the month before, indicating that the weak yen has yet to help companies to sell more products abroad. Economists believe more than a decade of deflation in Japan has contributed to a stagnant economy.

    "The big party we are having in the markets now is, of course, the financials. Banks are getting more money for free, utilities with big investment projects are getting zero cost capital now," said Martin Schulz from Fujitsu Research Institute. "The big story, and the lasting story, will be the exporters. A weaker yen helps the exporters to earn money with Japanese technology in Asian markets in particular."

    Global shift?
    On Thursday, the Bank of Japan embarked on what some are calling a new era of monetary easing. It will increase its purchase of government bonds by 50tn yen ($520bn; 350bn) annually. Analysts said that was the equivalent of almost 10% of Japan's gross domestic product, or total economic output, for the year. BOJ governor Haruhiko Kuroda defended the size of the stimulus saying the inflation target of 2%, called for by the government, would remain out of reach if the central bank continued its incremental steps. The Bank of Japan's new boss has said he will "do whatever it takes" to drive growth, a stance that has the backing of the country's also recently appointed prime minister. Their decision to spend Japan out of its economic troubles will be closely watched by other countries, correspondents say. First, there is keen interest in whether or not the government and central bank can work closely together and make a success of their stimulus policies, especially as they mark a significant change in economic direction. Second, there is likely to be close scrutiny from Japan's trading partners and rivals of how far the yen declines. Analysts said competitors were unlikely to sit quietly if their products became uncompetitive and Japan's attempts to boost growth complicated or compromised their own economic stability and success.

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