2014.10.3102:52:08UTC+00Japanese stocks jump on monetary base increase from BOJ

Japanese stocks surge on reports that the Bank of Japan surprisingly hiked monetary target expansion while the Government Pension Fund announced a $1.2 trillion worth of funds to be sued to bolster holdings of equities.

The Topix Index added 4.4% set for a 7.5% close for the week. Meanwhile, the Nikkei 225 stock Average surged by 4.9% to 16,427.06, 2:11 pm Tokyo time. The Topix Index was able to erase the year’s loss while the Nikkei 225 Stock Average reached its highest level since 2007. the nation’s currency weakened by 1.2% to match the dollar at 110.55 yen per dollar.

The Bank of Japan announced today that voters voted 5-4 to increase monetary target expansion to 80 trillion yen or $726 billion. Earlier, stocks has already bolstered due to the $1.2 trillion pension fund increase to bolster shares following the stronger-than-expected US economic growth.

Head of investment strategy at AMP Capital Investors Ltd. , Shane Oliver, commented to Bloomberg that today’s trading means a double boost for the Japanese market with the GPIF shares allocation increase and the BOJ’s faster cash pump rate. Oliver adds that it had been increasingly obvious that the BOJ was not doing enough that’s why they needed to act more and that it has always been a query of when they would add action. Oliver says that it is an “excellent outcome.”

US stocks advanced following the release of GDP report that showed that the data was better-than-expected. This signifies that the US economy is ready for higher interest rates.