BOJ Surprises Markets by Increasing ETF Purchases

The Bank of Japan surprised markets Friday by announcing plans to increase purchases of exchange-traded funds (ETFs) and lengthening the maturity of bonds it purchases to encourage investment in the economy.

The BOJ said under the new program, it will purchase ETFs at an annual pace of 300 billion yen ($2.45 billion) composed of stocks issued by firms “proactively” investing in physical and human capital.

The plan will start with purchases of ETFs tracking the JPX-Nikkei Index 400, which screens for factors including corporate governance and investor-focused management.

The new ETF purchase program will begin in April and is in addition to the current ETF purchase program of around 3 trillion yen annually.

The BOJ meanwhile held rates steady and said it will stick to its plan to increase the monetary base by 80 trillion yen a year, as expected.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.