Japan Stocks Rally as Uber Dovish PM Takes Office (EWJ)

December 26, 2012 8:58 AM EST
Equities in Japan rose Wednesday and the Yen weakened to its lowest level vs. the U.S. dollar since April of 2011. The weak yen came as newly elected Prime Minister, Shinzo Abe, took office. Abe is pressuring central bankers to set an inflation goal of 2 percent and has aggressive public works spending plans.

Japan has long been plagued with deflation, a problem Abe promises to end, and for the moment he has the support to do it – and he may have the firepower as well. The BOJ's latest policy meeting saw its asset purchase and lending program increase by $119 billion to $1.2 trillion.

Abe's policies are not without criticism as some fear corruption of central bank independence and long-term inflation will one day cripple the economy. For now, however, Japan has opted to throw caution to the wind in an effort to ramp up its economy.

iShares MSCI Japan Index (NYSE: EWJ) is expected to open higher in New York on Wednesday, adding to a 30-day rally of 5 percent.

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