Looking to play along with the Bank of Japan unlimited stimulus trade? Here are some stocks already moving on that bet

12/18/2012 5:30 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Japan’s stock market has already assumed that new Prime Minister Shinzo Abe will be able to deliver on his party’s campaign promises to force the Bank of Japan into a massive program of “unlimited” monetary easing. Abe has called for the Bank of Japan to buy bonds until it has raised the inflation rate to 2% from its current near 0% level. That would further weaken the yen against the U.S. dollar and the Korean won providing not just stimulus for the domestic economy but a huge boon to Japanese exporters.

So it’s not surprising that the stocks that have rallied most on the landslide victory on Sunday of Abe’s Liberal Democratic Party have been shares of Japanese exporters. If you want to trade along, I’d suggest a look at stocks that are moving up strongly in Tokyo.

That list would include Cannon, up 3.34% today in Tokyo (7751.JP) and 4.53% today in New York (CAJ); Nikon, up 2.61% in Tokyo (7731.JP); construction and mining equipment maker Komatsu, up 2.98% in Tokyo (6301.JP) and 4.2% in New York (KMTUY), industrial and farm machinery maker Kubota, up 3.64% in Tokyo (6326.JP) and 4.31% in New York (KUB), and Toyota, up 2.76% in Tokyo (7203.JP) and 3.07% in New York (TM.)

The Bank of Japan is scheduled for a two–day meeting to end on Thursday. There’s speculation in Tokyo that, in order to avoid the impression of giving in to pressure from Abe, the bank will raise its inflation goal to 2% on Thursday before the new Prime Minister can make a formal demand.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , may or may not now own positions in any stock mentioned in this post. The fund did not own shares of any stock mentioned in this post of the end of September. For a full list of the stocks in the fund as of the end of September see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

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