NEW YORK (MarketWatch) — Bank of Japan’s plan to expand its bond-purchase program, on Friday, delivered a big dose of euphoria to stocks around the world, including in the U.S.
However, the Government Pension Investment Fund’s plans to increase stock purchases in addition to the expansion of the central bank’s bond-purchase program, likely will be a boon for U.S. stock markets over the longer term, said Citigroup chief equities strategist Tobias Levkovich, in a note to investors.
The Japanese Pension Fund plans to increase its holdings of foreign stocks to 25% of its monetary base (from roughly 16% currently). This expansion, Levkovich notes, would benefit U.S. equity markets next year.
“While the exact amount of money coming to the U.S. is hard to calculate, the overall contribution to non-Japanese stocks could approach $60 billion of new purchases and we suspect that half could make its way into the U.S. by the end of 2015,” the note said.
Full article: Japan may add $30 billion in U.S. stock purchases by end of 2015: Citi (MarketWatch)