Nikkei in partial recovery as investors reassess BOJ steps

Thu Dec 20, 2012 12:18am EST

* Nikkei nears 10,000 on futures selling after BOJ outcome
    * Market sees little long-term impact from BOJ moves,
steadies

    By Ayai Tomisawa
    TOKYO, Dec 20 (Reuters) - Japan's Nikkei average edged down
on Thursday as investors digested the long-term impact on the
economy from the central bank's latest steps, after initially
selling stock futures that dragged down the index close to the
10,000 mark.
    The Nikkei shed 0.5 percent to 10,107.29 after
dropping as much as 1.2 percent to 10,035.54. The moves came 
after the Bank of Japan eased monetary policy on Thursday
afternoon by expanding its asset-buying and lending programme.
    It was a widely expected move in response to intensifying
pressure from incoming premier Shinzo Abe to deliver bolder
steps to beat deflation. 
    The central bank topped up its asset-buying and lending 
programme by 10 trillion yen to 101 trillion yen by a unanimous 
vote, expanding stimulus for the third time in the past four 
months.
    "Some investors were disappointed with the BOJ's
asset-buying amount. It expanded the programme by 10 trillion
yen for both short-term and longer-term bonds, but investors
were expecting as much as 10 trillion yen on just buying
longer-term bonds," said Norihiro Fujito, senior investment
strategist at Mitsubishi UFJ Morgan Stanley Securities. 
     The BOJ also signalled a review of its current 1 percent 
inflation target at its next policy-setting meeting in January, 
when Abe will have a new cabinet in place ready to negotiate 
with the central bank.
    "Abe has been demanding an inflation target of 2 percent,
but the bank postponed the decision about this without
elaborating," Fujito said.
    Some other market analysts said investors decided that their
long-term appetite would not change because of the
announcements, buying back stocks soon after selling.
    "They reacted by selling futures at first, but they were
like, 'wait a minute, this (the BOJ's meeting outcome) is not
something which will turn sentiment in the long term,'" said
Hiroichi Nishi, general manager at SMBC Nikko Securities, adding
that some investors picked up stocks afterwards.
    The broader Topix was up 0.4 percent at 842.87.
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