THE Bank of Japan (BOJ) made no purchases of Japan stock exchange-traded funds (ETF) on Monday (Mar 11), data from the central bank showed, despite Japanese stocks dropping below the central bank’s usual threshold for stepping in to buy stocks.
The Topix index closed 2.2 per cent lower at 2,666.83 on Monday, exceeding the 2 per cent mark that generally propels the central bank to intervene in the market.
While it was not immediately clear why the BOJ did not buy ETFs on Monday, it could signal a larger change, said Jun Morita, general manager of the research department at Chibagin Asset Management.
“With the Nikkei hitting a record high and prices seeming to be rising to meet the BOJ’s target, no purchases of ETFs by the BOJ means supporting the stock market has probably become less of a priority.”
The central bank has yet to buy ETFs this year to support the market. The previous time was on Oct 4, when it bought 70.1 billion yen (S$634.8 million) of ETFs. It also made consecutive purchases on Mar 13 to Mar 14 last year of the same amount each day.
BOJ governor Kazuo Ueda said last month the central bank would examine whether to continue its purchases of risky assets such as ETFs when sustained achievement of its 2 per cent inflation target comes into sight.
The BOJ’s next monetary policy meeting will be held on March 18 to Mar 19. REUTERS
