The Bank of Japan is worried about a stock market crash
The BOJ does not make public the process by which it buys ETFs, for fear of unduly influencing the market. But an official offered a passing reference to “last October” by way of explanation for the conservative approach.
But as 2015 drew to a close, market players nevertheless began to suspect that the bank was out of options. An extra ¥300-billion ETF purchase quota added at the BOJ’s December policy meeting was viewed merely as a tack-on measure and failed to keep share prices from entering a slide.This year, too, speculation around US interest rate hikes makes a stock market slide near the end of the year a real possibility.
The BOJ does not explicitly define its buying as a stock price control measure. But eschewing a regular buying schedule to tailor purchases to market movements speaks to a significant level of concern about staving off another slide.