Japan Just Boosted QE And The Nikkei Exploded To A 7-Year High

The Bank of Japan just boosted QE, and the Nikkei closed up 4.83%, hitting a 2007 high.

In a tight vote the BoJ backed an 80 trillion yen ($720 billion) target for expanding the monetary base (a measure of the amount of money held by the central bank and in the economy). That's up from a 60-70 trillion yen target before.

No prizes for spotting the announcement on this graph of the Nikkei:

This was a major unexpected move by Haruhiko Kuroda, the Bank of Japan's governor, and a big new chapter in the country's 'Abenomics' experiment, named after Prime Minister Shinzo Abe.

It's all in reaction to a slowdown in inflation: the BoJ has committed itself to reaching a 2% inflation target, but core inflation dropped from 1.1% to 1% in October, the lowest in nearly a year.

The dollar and yen are reacting pretty much as you'd expect too. Here the dollar is is, up 1.76% against the dollar. 111 yen to the dollar is the highest since 2008.