Investors and fund buyers are increasingly backing Japanese equities as the country boosts its QE programme, and rotates its national pension fund towards domestic equities.
Japanese stocks soared to a seven-year high at the end of October as the Bank of Japan unveiled a new round of quantitative easing, the timing of which surprised market commentators. The central bank will increase the monetary base to ¥80trn (£454bn) a year, up from a previous target of ¥60trn-¥70trn, in a bid to boost inflation to 2%. Simultaneously, Japan's national pension fund, the $1.2trn Government Pension Investment Fund, cut its government bond holdings and reallocated to equities (see table below). Managers hope these moves will prove supportive of asset prices in the...
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