Amounts of money into the monetary stimulus, but only three of 32 economists saw this one coming. Now it is going to be ¥80 trillion per year that the Japanese Central bank is injecting. About trying to foster that inflation, that 2 target they have. We look at what it did to asia. It ignited asian equities. Hang seng up more than 1 . Nikkei up almost 5 . Nikkei, highest in seven years. Lets see what it did to the yen. We saw the yen really see a sixyear low weakness, that is helping exporters of course. All of this helped by our rather tasty bit of gdp data yesterday. That helped the dollar. Lets look at what is happening to the dollarruble. We are expecting the central bank of russia to hike Interest Rates later. Could they hike by half offer percent half a percent . That is the consensus. Today, dollar is gaining against the ruble. Yesterday was a stellar day for the ruble. Saw strengthening against the dollar. The dollar lost 3 against the ruble yesterday. The dollar getting back some of its gains today. Rate hike . That what will that do to the ruble later . Lets move away from these markets. Lets move on to stocks. Had still a few fair bits of earnings coming out today. Rbs up 3 for the first time in three years, a profit in the Third Quarter for rbs. U. K. Data has been helping the economy. Those funds, they have come down. Also, same as barclays. Scaleddown Investment Banks, focus on retail. It seems to be paying off. It too sets aside 400 Million Pounds against a Foreign Exchange investigation. , raising their fullyear profit target well ahead of all the industry players. Iberia, ith airways, is well outperforming the industry. , doesnt seem to be doing too well. Off by 2 . You know the brands. They missed their jump. Just want to bring you some breaking news. We had the 12 punch. One from the japanese banks. 1. 2 trillion. They are reallocating assets into different assets. Let me give you the reallocation of that. Japans Government Pension Investment Fund now sets a foreign bonds target of 15 , a foreign stocks target of 25 . They also reduce the japanese 60 allocation to 35 from and they increase their target fromapanese stocks to 25 12 . Some slight deviations on the actual deviation limit. We can break that down later. Really in line with a lot of reports. The other punch, of course, the bank of japan and their surprise stimulus. We were talking about it earlier in the week. As the fed put an end to qe, would mario draghi cake up the backdrop . Governor kuroda is certainly doing more of the heavy lifting now. Lets bring in a special guest, global head of equities derivatives strategy at bnp paribas. Thanks for coming in. Busy, busy morning. Lets start with the pension investment fund. No big surprises there. Is this going to change anything for the fundamentals of the japanese economy . Whacks it is not so much that it changes the fundamentals directly. This will be implemented over several years. Because a lot of that money is targeted to the new 400 index, there is incentives to keep reproving improving return on equity. The government is also supporting that with tax changes. They support closing down lossmaking businesses and reallocating that capital, which is important. We get the fact that both of these announcements from the bank of japan probably isnt a coincidence. There is a lot of coordinated policy in japan. We could have had both of these announcements four months ago. The fact that we are getting them now is almost a surprise. To me about how these moves are coordinated and what they mean for each other. Perhaps the Government Pension Investment Fund just needed to get out of the bank of japans way, to make Assets Available to buy. Certainly one of the consequences of being everywhere is the crowding out of private investment. In europe, the ecb purchasing assetbacked securities and providing financing to the banks means it is difficult to buy certain fixed and some fixed income securities. In japan, the policy is about trying to beat the potential that you reach full employment and you get an inflation problem. Before you get the structural things necessary for growth. It needs to be coordinated. We will talk about the trades after the break. I want to get through the politics. Kuroda says it has nothing to do with the fed winding down qe, nothing to do with the sales tax hike. How coordinated is this within japan . Abe wants to boost the sales tax. Is this related . Japan does have a very coordinated response. Are steps of policies to continue with that momentum. Of bonds ton out buy when they get uncontrolled depreciation. That may worsen as japan approaches full employment. So they have got a window here to try to push things along further and get momentum going before they run into more obstacles. Of asian team have targets 16,000 for yearend and 20,000 the year after. In that window, the risk is increasing. That is why we are changing our strategy. Jerry fowler stays with us. Big day for equities. Equities here in london up 1 , the bank of japan moves. We will discuss it after the break. Welcome back. Im Jonathan Ferro live in london. This is on the move. Lets get back to business. Stimulus from the bank of japan, stocks soar, the yen down. With a 54 japan vote. This wasnt unanimous, to boost assets higher. Joining us now with more is really live from tokyo. Not a unanimous decision, but a big surprise that they have done this the way they have. Absolutely. It is clearly related to two events. You mentioned for tailoring. The other issue was inflation numbers. Thatnk kuroda has realized expectations of reduced to present inflation is wildly optimistic. When you look at some of the prices here, inc. Are moving in the opposite direction. I wouldnt call this a display of panic, but it is already obtained to the world, we are on this. Here inrecognition tokyo at the nymex is not working as hoped. Cs is not working as hoped. What worries me a little bit is that we are still treating the symptoms of the problem, not the underlying sickness. The need for Greater Consumer demand, for companies to increase wages. We are not getting anything from tokyo to create the cycle that will produce sustainable growth. The question is, what do we do next to sustain the sugar high . Talk to me about the politics. In the last month or so, it sounded like officials in japan were leaning against a weaker yen. A lot of people would talk about that and say it could be one of the reasons the bank of japan would hold off stimulus. How political was this decision . Kurodaany ways, i think knows that his job is on the line. If he doesnt pose produce inflation. There is this interesting debate in tokyo. This time around, in some ways it is hurting some sectors of the economy. It is making consumers feel less wealthy. It is making older consumers feel less wealthy. In some ways, it is backfiring. Developing very nation view of currencies. There is a bit of a dark side to that. I dont know if this is engineered to weaken the yen. Saying,the bojs way of we understand, give us more time. What i am waiting for now is Prime Minister abe to come forward. That was the important part of abenomics, to loosen labor markets, to empower women, to make japan more innovative and entrepreneurial. We see no action. What we saw today is a lot of being a lot of money being pumped into markets. We havent seen steps to make the economy more competitive. It is good news in the short run. What happens next month . The Monetary Policy side of things always the easiest part. The reform, that is more difficult. Thanks for joining us this morning from tokyo. Jerry fowler is still with us. Back to thet to get Government Pension Investment Fund reallocation in japan. No big surprise on the domestic side of things, but perhaps a bigger shift to investing abroad if you are looking at overseas shares. Foreign debt, 15 from 11 . We can bring up italian debt, spanish debt. Little bit of qe for europe as well . It might well be. The ecb might to join next year. The japanese investors, for decades, have been good foreign investors. One of the negative consequences of this sort of policy is that Retail Investors might be more encouraged to get their money offshore. To some extent, that is the same in europe. If the ecb moves to a looser policy, this Dollar Strength story may actually look a lot like 1998, where you have a russian debt crisis. Followed by an and or miss boom in the dollar and dollar assets. Start to putors all their money into u. S. Assets, which helps the dollar. The fact that the s p 500 was up 1. 2 percent is also telling. Talk to me about european assets. The trend has been short yen come along nikkei. In europe, that is not what happens. The ecb hasnt done enough area while the euro has come it might be worth 5 to some of the exporters. You can see the impact of that. Global exporters are outperforming the smaller caps in the periphery. But they are all down because what is trumping the currency weakness is the massive reduction in expectation inflation. Inflation expectations. If that is implied to be a 1 decrease in nominal gdp growth, that translates to 20 lower earnings profile. That is trumping the Currency Movement at the moment. The moment the ecb does something credible, you get a variable upswing in European Growth which will come through very quickly. The move in the five year, is that one of two things or both . Is that questioning the health of the european economy or questioning the credibility of the ecb . That move has happened since mario draghi went to jackson hole. It is a combination of both. That is fiveyear inflation which has come down significantly as well. The nominal yields have also come down because growth is lower. The last six months have been a tough time. Expectations have been declining. We are starting to see some positive news on the growth side of things. Someis potentially where of the fiscal stimulus packages might help. Havent got their credibility back in terms of making sure they stop that downward spin. Tradingome up with strategy so you can help us here. Treasury yields, it was thought we would get higher yields and lower u. S. Stocks. Go higher in the u. S. From here considering everything going on globally . So far, growth suggests they are far too low, yields. You have nominal gdp expectations ranging between 4 and 5 and yet you have got the two year yield sorry, the 10 year yield at 4. 2. They are still very low. So either the growth assumptions need to come down to meet the reality, or the bond markets are not putting enough faith in the growth recovery in the u. S. If either of those two converge, it is going to be bad. The best Case Scenario for equities in the u. S. Is that you get yields going up because growth is strong and that is enough to keep equities supported. Equities will do quite well in that environment. You get a significant contraction of growth expectations or a sharp rise in yields. Lets wrap everything up. A lot of people talk about kuroda. Everyone will be looking at mario draghi, wondering whether he can do the same. When you look at a bank like the making thek of japan nikkei 400 eligible for purchases, the ecb is never going to be the bank of japan. They dont seem to be heading in that direction. Who knows where the next central bank will be to buy equities . Certainly, there is a lot of potential currency volatility out of these policies. But they are necessary policies. Gaps,we close these europe still has a very large output gap, until these gaps get consistent inflation, then we have got a risk that these policies continue to expand. Fascinating morning. We could talk forever about the Central Banks but we will save that for another time. As we head to the break, lets check in on a couple of banks. B. N. P. Paribas opens to 11 boost in profit. Rbs also posted its first thirdquarter profit in years. We will bring you more on those later. Stocks are up across the board. Welcome back to on the move. Im Jonathan Ferro live from london. Lets bring you up to speed with some companies on the move. Ab inbev thirdquarter profits fell short of analyst estimates. Adjusted earnings rose just 1. 3 . Analysts had been expecting 7 growth. The company said volume fell more than 2. 5 . 40 of that decline coming from europe. Shares of starbucks fell as much as 5. 5 last night after the coffee chain posted sales that missed analyst estimates. Samestore sales rose 5 . Theysts were expecting figure to rise on the back of expanded offerings like the Pumpkin Spice latte in the u. S. Give it a couple of days. Sony posted a narrower than expected loss in the second quarter. Helpg demand for the ps4 to limit the impact. Sony maintains its forecast for its fullyear net loss of more than 2 billion. British airways and iberia owner iag released Earnings Figures this morning. Thirdquarter profit missed estimates. The outlook could be brighter. Here with more is caroline hyde. Lets start with the numbers. Missed, theyy they are up 31 . Still strong. When you compare it to yesterday, Deutsche Lufthansa announcing its profit warning. When you think of air france, profits slumped by 60 on the back of its strikes. This is the outperform or when it comes to airlines. Ryanair is the only company year to date whose shares are. Utperforming what is impressive is the fullyear forecast. Now they see fullyear profits climbing anywhere up to 77 this year. There and this is all about willie walsh getting a grip of the situation. Air france, dont you left on the coming under the concerns of strike actions. Lufthanzae lef coming under the concerns of strike actions. Is that why he is beating the industry . Just picking up the slack being left around by the likes of air france . Picking up the slack, adding capacity, but also discipline. Jobs over at3000 iberia because of the economy. This is now reaping rewards when it comes to efficiency. Per employee, they are getting 11 more out of each employee. They are managing to push their workers harder. Scrapping worstperforming operations. They are being pretty brutal about it. When it comes to longhaul flights to america, they are adding. They are able to invest in new, more efficient planes. When you look at their costs, fuel costs are falling because of oil price, but nonfuel price is down. The fears about ebola, not really hitting the bottom line. Not even mentioned in these earnings. He spoke about it in america and said ebola is not impacting us in any way. They had to shut their routes to sierra leone and liberia, but nt onaid that was concern of spreading of the disease, it was on demand. It doesnt seem to be hitting the bottom line. One of the stocks to watch this morning. Up 2. 8 . In the fx market, it is dollaryen. Up by 1. 9 , the biggest move higher since 2013. Break down the moves after the break. Welcome back. I am Jonathan Ferro at bloombergs European Headquarters in london. This is what the market looks like right now. The ftse here in london up 1 . The dax up by 160 points. The bank of japan boosts stimulus. We are talking about qe3. We are talking about qe forever as the bank of japan boosts stimulus again. We will break down the car and the foreign currency moves. Earnings, earnings, earnings, green, green, green. Bnp paribas up by 2. 5 . Earnings at frances biggest bank beat expectations today, rising by 11 . Provisionsloss falling 9. 2 on the quarter. Corporate and Investment Bank pretax profit up by 19 . Iag, the Parent Company of British Airways and iberia, thirdquarter earnings up by 30 , held by increased capacity and reduced costs. Ba expanding. Strong north atlantic demand. Slashing jobs as well. And routes. Iberia is seeking a 1. 8 billion euro operating profit by 2015. Full year earnings will be 550 Million Euros. 600 Million Euros higher than. Ast years 770 Million Euros by 3 s why shares are up today. Rbs, thirdquarter profit beating expectations even though it set aside 400 alien pounds because of a current 400 Million Pounds because of a currency rigging probe. First profit in the Third Quarter in years. The chief executive cutting back Investment Banking. He focuses on Domestic Company ors to reverse customers to reverse six straight annual losses. Has rbs begun to turn the corner . Maybe. Shares are up i 1. 5 . Stocks are up everywhere. We will break it all down for you. Here are the top headlines right now. The bank of japan unexpectedly boasted monetary easing this morning in the first policy change since april of last year. The Central Banks board voted on an ¥80 trillion expansion of the monetary base. The moves come the same week the Federal Reserve ended their qe program. Stocks in tokyo up, the yen down. More than 1. 5 against the dollar, 1. 9 on my screen right now. Setias central bank also to raise Interest Rate for the fourth time this year to combat the currency run that is stoking inflation. The bank of russia will probably hike its key rate to 8. 5 from 8 . The announcement will come at 1 30 local time in moscow. Staying in russia, the nation agreed to restore national gas natural gas exports to ukraine. Supplies were halted in june. Attempted to avoid a winter fuel crisis. Russia says it may resume deliveries within 48 hours. We will get october inflation data for the eurozone at 10 00 london time. Consensus is a rate of 0. 4 . Inflation in germany disappointed yesterday. The lowest reading since may. Speculation that the number this morning could come below the current 0. 3 . Lets ask hans neck owes. Yesterdays german number could be setting us up for a disappointment this m