Central Banks

Japan press: Bank of Japan shows signs of

This via Nikkei over the weekend, on the bojjBank of Japan ETF buys 

  • The Bank of Japan is quietly tapering its purchases of Japanese government bonds … Some surmise that the BOJ is doing likewise with ETF buying in order to trim what it sees as an outsize profile in the equity market.
  • In the past year, the BOJ stepped in to buy ETFs almost every day when the Tokyo Stock Price Index, or Topix, slipped more than 0.2% during morning trading. But out of three such days this month, the bank did so only on April 3, when the index dropped 0.52% in the morning.
  • The BOJ also intervened the following day despite a morning drop of just 0.14%, but sat on its hands on April 12 and again on Tuesday, when the Topix fell 0.21% and 0.22%, respectively, in the morning.
  • “The BOJ won’t be buying today,” a Japanese securities trader conjectured Friday morning, as the 0.2% rule of thumb — one never explicitly admitted by the bank — appeared to be growing obsolete.

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