Salient to Investors:

Ryota Sakagami at SMBC Nikko Securities said the Japanese stock market is on the verge of a bubble as the BOJ and the government work to push up asset prices. Sakagami said the BOJ indicates it will act if the market were to fall so do not expect a correction.

The Nikkei 225 is at 1.6 times book value versus 1.1 on November 14 2012.

Soichiro Monji at Daiwa SB Investments said the change in monetary policy is clear and expects the Nikkei 225 to rise to 16,000 in 2013.

Shinichiro Nakamura at SMBC Nikko Securities said expectations for inflation under the BOJ’s new policy would be positive for bank lending.

Greg Gibbs at Royal Bank of Scotland said the new BOJ policy means life insurers cannot even purchase enough Japanese government bonds to meet asset liability matching demand.

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