Asia Rallies as Bank of Japan takes Action

The Asian markets were rallying today as the Bank of Japan announced they would be increasing their fund set aside to purchase government debt and assets by 10 trillion Yen. The move mirrors a new stance made by the US Federal Reserve last week which is designed to stimulate their respective economies into action, hopefully resulting in signs of growth.

The days biggest gainer was Nissan Motor co. who saw protests come to an abrupt end outside their production plant in china, whilst also being heavily dependant on exports, making this round of quantitative easing extremely favourable to them. Their stock rose by 3.7%, which is a step in the right direction after yesterday’s figures for new car registrations in Europe hit their stock.

JFE Holdings, one of Japans largest producers of steel, made solid gains of more than 2%. Japan Airlines co. also saw gains of 1.1% on it’s debut to their market, in what turned out to be one of the biggest IPO’s of the year.

 

Index Reactions

Gains of 0.5% were seen on the MSCI Asia Pacific Index, which rose to 123.75, leaving it in a position for it’s highest price at the close of play in more than 4 months. The index enjoyed a 3:1 ratio of rising stock compared to fallers in what now looks like a long term investment coming to an end for many traders. The anticipation of this move by the Bank of Japan has lead the index to realise gains of more than 8% this year as analysts predicted central bank action in the far east to improve the prospects and long term security of any and all financial growth.

The Japanese Nikkei 225 index climbed by 1.2%, leading the Topix Index which made advances of 0.9%.

Bank of China Refreshes Stance

The People’s Bank of China released a statement via their Governor, Zhou Xiaochuan, reaffirming their stance on monetary policies. He said the People’s Bank of China would “maintain the continuity and stability of monetary policies and at the same time make adjustments more forward-looking, targeted and effective, according to a commentary published in the Financial News.”

About the Author
Marcus Holland is editor of the websites financialtrading.com and options-trading.com. He holds an Honors degree in Business and Finance and regularly contributes to various financial websites.

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