With U.S. Fed Taking Foot Off the Pedal, BoJ and Japan's Pension Fund Accelerate
U.S. stocks gained on the back of more stimulus from the Bank of Japan (BoJ) and a move by the county's Government Pension Investment Fund (GPIF) to increase allocation to foreign equities.
In a surprise move, the BoJ expanded its Japanese Government Bonds (JGB) purchases to 80 trillion yen from 50 trillion yen and announced a substantial extension of the average maturity of its operations, to 7-10 years from 6-8 years In addition, the BoJ raised its authorization for ETFs purchases to 3 trillion yen from 1 trillion yen and J-RIETs to 90 billion yen from 30 billion yen.
In a survey from Nomura, only 9% of respondents expected easing at this meeting. They said the move should take the BOJ's share of the outstanding debt to 32% at end-2015 compared with 24% at end-2014.
Separately, Japan's Government Pension Investment Fund (GPIF) announced changes to its medium-term plan and revisions to its basic portfolio, increasing equities and decreasing bond allocations. Japanese bonds: 35% (60% previously); Japanese equities: 25% (12%); foreign bonds: 15% (11%); and foreign equities: 25% (12%). Total assets under management at GPIF were 127 trillion yen as of the end of June.
Shortly after 10:30AM ET, the Dow is Up 167, the Nasdaq is up 61 and the S&P 500 is up 20.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Buy the dip in US stocks in case of a 'rate shock' - Goldman
- Barclays explains why S&P 500 keeps rallying despite hot CPI, PPI data
- Pullback in AI beneficiaries is 'a buying opportunity' - UBS
Create E-mail Alert Related Categories
Fed, Market Check, Trader TalkRelated Entities
Standard & Poor's, NomuraSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!