BOJ Reluctant To Scrap ETF Buying Goals at Review

BOJ Reluctant To Scrap ETF Buying Goals at Review

Bank Of Japan said to be reluctant to scrap ETF buying targets for stock fund purchases at its policy review next month as it could give the impression on it is dialing back its stimulus fund, according to people familiar with the matter. Some BOJ officials say that having no guidelines would leave the central bank’s stance too unclear, the people said.

As we know, Japan’s stock index has reached an all-time high and so has the stock index in the United States. This gives investors a red light to invest in the stock market.

The BOJ has extended the loan facility for six months until March 2021. Hiroaki Muto, a well-known economist at Sumitomo Life Insurance Co. told reporters that given the still fragile and faltering economy and pandemic shows little sign of easing. Thanks to a flood of loans, Japan has avoided a surge in corporate bankruptcies but is causing new problems. The Bank of Japan will have fewer “bullets” to ward off the next wave of economic tsunamis.

Several purchases of stocks from local Japanese investors including Exchange-traded funds have formed bubbles. And the price is too expensive for retail investors to reach. Not only the stock exchange, in the commodities sector also includes crude oil and copper. Even the rise in crude oil prices is unnatural and does not match the existing fundamentals.

Leave a Reply