BOJ Decision ‘Strong Conviction’: Henderson’s Hall

Jeremy Hall, Singapore-based director of Japanese equities at Henderson Global Investors Ltd., which oversees about $99 billion, comments on the market impact of the Bank of Japan’s efforts to end deflation.

BOJ Governor Haruhiko Kuroda began his campaign to end 15 years of deflation with a strengthened stimulus program that will see the central bank buy 7 trillion yen ($73 billion) of bonds a month. Policy makers set a 2 percent inflation target within two years.

On BOJ policy:

“It’s a pretty comprehensive spread of proposals. It’s a pretty strong statement of conviction from the Bank of Japan.

‘‘Obviously, the BOJ can’t do it alone. You also need to see a reciprocal action over the longer term on the structural side as well.”

On market valuation:

“I’m still quite constructive on the outlook for Japanese equities. Valuations are still pretty cheap. It is dependent on delivery of improving earnings.”

On inflation:

“The inflation target is aggressive. The fact that they’ve set the target with a time scale is very important.”

(Corrects currency conversion in second paragraph.)
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