Nikkei zooms as central bank fresh stimulus

Japanese share market closed the session sharply higher on Friday, 31 October 2014, on broadbased buying after the Bank of Japan's expanded the pace of its quantitative easing and media reports of an aggressive shift in government pension fund investment. The benchmark Nikkei Stock Average gained 4.8% to 16,413.76, the highest close since November 2007.

The central bank expanded the size of its Japanese Government Bond purchases to the equivalent of about 80 trillion yen a year, an increase of 20 trillion yen from the current asset-buying scheme. It said it would also buy longer-dated JGBs, seeking an average remaining maturity of 7-10 years. The central bank also said it would triple its purchases of exchange-traded funds and real-estate investment trusts.

It's reported that the $1.2 trillion Government Pension Investment Fund, or GPIF, will raise foreign investments holdings from 23% to 40%. That includes 25% of overseas stocks and 15% of bonds and is significantly higher than market's expectation of around 30% in total. Local stock holdings will be raised to 25% and domestic debt holding would be lowered to 35%.

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