Tokyo stocks soared on Friday after the Bank of Japan unveiled plans to effectively charge lenders to park their cash with it as investors cheered the surprise stimulus. The benchmark Nikkei 225 index at the Tokyo Stock Exchange, which fell in the morning, jumped 2.8 percent, or 476.85 points, to 17,518.30 at the close, as the BoJ surprised investors with the negative rate policy.
The Topix index of all first-section shares climbed 2.87 percent, or 39.97 points, to 1,432.07. The yen weakened to 120.48 per dollar from 118.90 in morning trade following the BoJ announcement it was implementing a -0.1 percent interest rate. Not all analysts were impressed with the central bank's move. "It's no use expecting anything more from the Bank of Japan - this time they're pointlessly confusing the market," Norihiro Fujito, general manager of Mitsubishi UFJ Morgan Stanley Securities, told Bloomberg News. "In the end, it's symbolic of the limits of the BoJ's policies."
Data earlier Friday painted a worrying picture of Japan's economic malaise, with inflation at a well-below-target 0.5 percent last year. Also, spending by households in December fell 4.4 percent from a year ago and monthly industrial production contracted 1.4 percent. The economy grew a stronger-than-expected 0.3 percent in July-September, after initial estimates had shown a contraction. Fourth-quarter data are due next month.
But a lacklustre global economy, marked by the slowdown in China and weakness in emerging markets, is posing challenges to the recovery. The BoJ on Friday warned over the decline in crude oil prices and uncertainty about "future developments in emerging and commodity-exporting economies, particularly the Chinese economy".
The BoJ decision comes a day after a key ally of Prime Minister Shinzo Abe, economy minister Akira Amari, quit over a corruption scandal. Amari was the point man on the Pacific-wide free trade pact and a key face in Abe's bid to overcome Japan's long economic funk. In Tokyo share trading, auto parts supplier Takata jumped 10.72 percent to 661 yen on reports its boss would resign as it deals with an exploding airbag scandal blamed for nearly a dozen deaths and scores of injuries globally. But after the closing bell Takata said its boss will stay. Daihatsu soared 3.51 percent to 1,860 yen after days of huge gains amid reports Toyota plans to turn its mini-car unit into a wholly-owned company. Toyota officially announced it was doing so after the market closed. Factory robotics giant Fanuc tumbled 12.72 percent to 15,810 yen after cutting its full-year profit forecasts owing to a slowdown in China.
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