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.