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Market Update

Bank of Japan Holds Asset Purchase Program, Nikkei Down 1.3%

Author: Hiruki Nakamura
Last Update: 7:46 AM ET December 18 2015

4:30 PM Tokyo – The Nikkei 225 average declined 1.9% today and fell 1.3% in the week. The Bank of Japan kept its monetary stimulus unchanged and proposed a new ETF purchase program. Kumiai Chemical net soared 115%. Oracle Corporation Japan profit rose 3%.

Tokyo stocks declined across most sectors as investors took profit taking after a 2-day rally.

Nikkei averages and other indexes rallied briefly after the Bank of Japan released its new purchase plan of exchange-traded funds.

The central bank announced a new ETF purchase program with an annual budget of 300 billion yen. The program starts in April, 2016, and aims to neutralize the market impact of selling shares that the ce had purchased from banks.

The Bank of Japan decided to keep its monetary stimulus unchanged at 80 trillion yen in asset purchases annually, indicating confidence in the economy, at its December monetary policy meeting.

The average maturity of Japanese government bond holding is extended to between 7 and 12 years.

Kumiai Chemical net soared 115% and Oracle Corporation Japan profit rose 3%.

The Nikkei 225 Stock Average declined 366.76 or 1.9% to 18,986.80 and the broader Topix index dropped 27.61 or 1.8% to 1,537.10.

For the week, Nikkei 225 decreased 1.3%.

The yen slipped against the dollar to 122.05.

Stocks in Review

Fujitsu Ltd declined 4.1% to 624.10 after President Tatsuya Tanaka said the company would study all business options for its PC business, leaving open the possibility for an alliance and a spin-off of the division.

Fujitsu is planning to spin off its mobile phone handset business and the PC operations next spring in an attempt to improve profitability.

“We are discussing a plan to bring the mobile phone and PC operations back to the black in fiscal 2016,” Mr. Tanaka said. “We believe the turnaround is attainable.”

Kumiai Chemical Industry Co., Ltd soared 9.9% to 1,124 after the chemical maker reported better-than-expected profit.

The chemical products maker said sales in the year ending in October jumped 10.4% from a year ago to 61.12 billion yen.

Net income soared 115.1% to 6.56 billion yen and earnings per share advanced to 82.13 yen from 38.17 yen in the same period a year ago.

Message Co., Ltd surged 21.2% to 2,854 yen on the announcement that nonlife insurer Sompo Japan Nipponkoa Holdings offered to acquire 34.70% of the nursing home operator.

Oracle Corporation Japan gained 0.7% to 6,070 yen after the enterprise software developer reported net income in the period rose 2.8% to 15.13 billion yen.

Net sales in the first-half ending in November fell 0.5% from a year ago to 77.79 billion yen.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc