Tokyo stocks skyrocketed on Friday as investors embraced sweeping new monetary easing measures from the Bank of Japan that sent the yen plunging, spelling good news for the country’s struggling exporters.
The scope of the BoJ action on Thursday -- including doubling the money supply -- took some analysts and investors by surprise, despite expectations of major moves by the central bank in its first meeting under new management.
The yen slumped against the dollar and euro after Thursday’s announcement, the benchmark Nikkei jumped and bond yields hit a record low as new BoJ governor Haruhiko Kuroda vowed no let-up in the battle against deflation.
In early Friday trade, Tokyo’s Nikkei 225 index was up 4.68 per cent, or 591.08 points, to 13,225.62, touching intraday levels last seen in August 2008 and the yen weakened further in Asia.
By 0140 GMT, the benchmark index was still up 3.56 per cent while the broader Topix index of all first-section shares had climbed 4.12 per cent, or 42.82 points, to 1,080.49.
The jump marks a big bet from investors who have so far given the thumbs up to the economic policies of Prime Minister Shinzo Abe after he swept December elections on a pledge to kickstart Japan’s struggling economy.
“Japanese stocks had long been undervalued, so the gain is justified,” said Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking Corp.