Nikkei closes highest since October 2008 on hopes of new central bank team
06 Feb 2013
Japan's Nikkei average shot 3.8 per cent to close at its highest since October 2008, following bets the early exit of the central bank governor opened the way for one who pursued aggressive monetary easing.
The benchmark closed on 416.83 points to 11,463.75, on a day which saw it gain since March 2011, with the Japanese currency hitting a new low of 94.08 against the dollar.
Meanwhile, Bank of Japan governor Masaaki Shirakawa said he would step down, along with his two deputies, three weeks prior to the end of his five-year term in April.
Prime minister Shinzo Abe has been pushing the central bank hard to do more to pull the economy out of the doldrums. He had made it clear that he wanted a governor who would take bolder action in loosening monetary policy.
According to analysts, there was a very aggressive, solid weakening of the yen in response to what seemed like relatively trivial news, but it was nonetheless news that signaled the expectation and recognition that the momentum in Japan continued to favour yen weakening.
Though investors have been faulting exporters over the past two-and-a-half months as the yen receded 15.5 per cent against the dollar, according to analysts who say there were more benefits to a more competitive exchange rate.
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