The Bank of Japan disappoints the markets and the Tokyo Stock Exchange closes sharply lower. At the end of the session the Nikkei225 index drops 1,45% – close to the lows of the session – at 13.317 points, while the yen strengthens again. The Topix lost 0,97%. The Bank of Japan has decided to take no further steps to stimulate the economy, arguing that there are already signs of recovery. Instead, investors were waiting for new shares to favor the government bond market.
The real estate sector was particularly weak with the benchmark index losing 4,10%, while Toyota was the most traded stock and closed in positive territory.
The Central Institute foresees an annual increase of 60-70 thousand billion yen (461-569 billion euros) of the monetary base and foresees the repurchase above all of Government bonds to liven up business activity; it also estimates an inflation target of 2%.
"The foreign economy is gradually moving towards an improvement", notes the BoJ, signaling that Japanese exports are recovering, as are business investments, albeit still declining in the first quarter. Public works are driven by the reconstruction of the north-east devastated in March 2011. According to the Boj, "consumer confidence is also improving". The institute "will continue its expansionary policy as long as it is necessary to achieve the 2% inflation target".
