BoJ shows signs of backpedaling on ETF purchases - Nikkei

The Nikkei Asian Review published a story over the weekend on the Bank of Japan’s (BoJ) ETF purchases, citing that the central bank's fund buys in April is set to undershoot pace for full-year target.

Key Highlights:

“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.”