By Dominic Lau and Tomo Uetake
TOKYO (Reuters) - The Bank of Japan's massive stimulus to pull the economy out of two decades of malaise has altered the outlook for Japanese assets, according to a Reuters snap poll of analysts conducted after the central bank shocked markets with its radical shift in policy.
The bold plan to inject $1.4 trillion into the world's third-largest economy in less than two years has already pushed the yen to near 100 to the dollar, the lowest since April 2009, and Tokyo's Nikkei (.N225) to a nearly five-year high.
It caught the market by surprise, forcing many analysts to revamp their forecasts for the Nikkei, 10-year JGB yield and the dollar/yen.
Analysts now expect the Nikkei, up nearly 30 percent so far this year, to rise 40 percent in 2013 to 14,500, the highest since June 2008, while the yen will likely slide 18 percent against the dollar to close the year around 102 to the dollar.
Just a month ago, the Nikkei was expected to reach 14,000 by year-end while the latest Reuters foreign exchange poll - on April 3 - showed the dollar trading at 98 yen in twelve months.
If the index were to complete the feats the poll projects, it would be the biggest annual rise since 2005 and should easily make the Nikkei the developed world's best performing stock market this year.
"As the BOJ's 'new dimension of monetary easing' has changed where the Japanese market is heading, we should reset our targets in order to maintain our bullish stance on the Japanese stocks," said Kyoya Okazawa, head of global equities and commodity derivatives at BNP Paribas in Tokyo.
"The BOJ's easing has take the markets into an entirely 'new stage', so I believe we too will need to adjust our target accordingly."
(Personal Sharing)
The problem with Japan is that they they are over productive and they have encumbered their economy by not allowing enterprises to fail and propping them up by taxation thus reducing economic growth.
Japan is effectively a socialist state that is running out of other peoples money so now they are printing their own.
They are effectively going to war with the rest of the world to help pay for their socialism at home.
They are making the things they sell cheaper for others and making things by others much more expensive for themselves.
The inflation they engender will drive interest rates higher on their bonds and this will draw money out of stock markets world wide.
With everybody joining the printing game there is going to be only one end and it won't be pretty.
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