Japan Plans Big Stock Purchases

Japan is expected to invest up to $14 billion in the Tokyo stock market in an attempt to head off any repeat of the weakness that gripped stock prices earlier this year, traders and analysts said Tuesday.

Giant government institutions such as the Postal Savings and Postal Life Insurance systems are said to be ready to start making big investments by as early as next week.

The 225-share Nikkei average ended 216.48 points, or 1.20%, higher at 18,282.72 Tuesday, and some analysts say big public investments should keep the key price gauge above the 18,000 mark for some time to come.

The Postal Life Insurance system alone has about $8.2 billion uncommitted that it can invest in stocks. The Postal Savings and government pension programs have another $2.89 billion each.

“This will have a big impact in supporting stock prices,” said Yasumasa Kamiyama, a general manager at New Japan Securities Co.

“People are thinking that the government buying will mark the bottom, so sellers are thinning out,” said Isao Okada, a director and head of equities at Taiheiyo Securities.