February 18, 2014 / 4:45 AM / 4 years ago

Nikkei rises more than 3 pct after BOJ decision, banks soar

* Nikkei hits 1-week high after BOJ stands pat on policy
    * Banking shares outperform after BOJ said to extend loan

    By Ayai Tomisawa
    TOKYO, Feb 18 (Reuters) - Japan's Nikkei share average
soared to a one-week high on Tuesday afternoon, spurred by banks
after the Bank Of Japan said it would extend loan facilities by
a year at its policy meeting.
     As widely expected, the BOJ kept monetary policy steady and
maintained its upbeat assessment on the economy. It also decided
to extend three special loan facilities by a year from their
scheduled expiry at the end of March. 
    The Nikkei jumped 3.2 percent to 14,858.87 in early
afternoon trade, the highest since Feb. 12. The benchmark closed
its morning session at 14,526.04.
    The banking sector was the top gainer, with Mitsubishi UFJ
Financial Group jumping 4.4 percent, Sumitomo Mitsui
Financial Group up 3.9 percent and Mizuho Financial
Group rising 2.8 percent.
    "There was no surprise from the meeting about policy change,
but the announcement about extension of loan facilities is
positive," said a fund manager at a Japanese asset management
firm. "Short-term buyers are picking up banking shares."
    The central bank will also double the size of funds
available to financial institutions through the various loan
facilities in the hope they would boost lending instead of
sitting on the pile of cash.    
    The Topix gained 2.5 percent to 1,221.81.
    The JPX-Nikkei Index 400, an index launched this
year comprised of firms with high return on equity and strong
corporate governance, gained 2.5 percent to 11,041.49.
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