Bank of Japan likely offloaded shares as stock prices stabilize

Japanese media, Nikkei, report on how the Bank of Japan is likely to have offloaded some of the shares it has accumulated. Nikkei says

  • The BOJ is believed to have turned a seller in 2023 as its sales of stocks previously purchased from banks as part of measures to stabilize the financial system likely outstripped ETF purchases, which decreased significantly because of stabilizing stock prices.

Says Japanese equities in 2023 were lifted by money from foreign investors and share buybacks by Japanese companies.

  • Private money drove up prices even as the BOJ’s presence as a buyer declined

The Bank of Japan ETF purchases in preceding years were aimed at easing downward pressure on asset prices and prevent a deterioration in market sentiment. From 2017 to 2020, under the BOJ’s ultraeasy monetary policy, the purchase amount ballooned to between 4 trillion yen ($27.8 billion at current rates) and 7 trillion yen a year. A decline became noticeable in the spring of 2021, when the policy was revised to limit purchases to days when stock prices fell sharply. The annual figure fell below 1 trillion yen from 2021 on, and in 2023 it came to around 210 billion yen.

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This article was written by Eamonn Sheridan at Source