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Nikkei rises to highest level since 2007

FXStreet (Mumbai) - The Japanese equity index rose to a level last since seen in November 2007 after the Bank of Japan (BOJ) surprised markets by expanding its monetary stimulus program earlier today.

The Nikkei has gained 4.83% to trade at 16,413 levels. The index hit a high of 16,533 earlier today, a level last seen in November 2007. The equities rallied after the Bank of Japan gave in to calls to increase its monetary stimulus program in order to counter the negative effect of the April sales tax hike. The BOJ said in its statement that it would expand the country's monetary base at an annual pace of about JPY 80 trillion per year, compared to the JPY 60-70 trillion it has targeted since April.

Moreover, the BOJ expressly stated that Japan's "deflationary mindset" may not reverse unless it took more action. Meanwhile, the increase in the stimulus has pushed the USD/JPY exchange rate above 111.00 levels, which is aiding the exporter shares.

Nikkei Technical levels

The index has an immediate resistance at 16,320 (Dec. 2013 high), under which the prices can fall to 15,942 levels. On the flip side, the index may rise to 16,800 levels if it manages to end the day above 16,320 levels.

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