Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Japan
  4. Japan Exchange
  5. Bank of Japan
  6. News
  7. Summary
    8301   JP3699200006

BANK OF JAPAN

(8301)
SummaryChartsNewsCompanyFinancials 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

After tapering, BOJ must weigh exit from ETF holdings: former c.banker Sakurai

06/15/2021 | 12:48am EDT
BOJ board member Sakurai poses for a photo after an interview with Reuters at the BOJ headquarters in Tokyo

TOKYO (Reuters) -The Bank of Japan must eventually consider ways to unload its huge holdings of exchange-traded funds (ETF), such as by selling them to households, said former central bank policymaker Makoto Sakurai.

But the timing will be years away as Japan's economy could take until 2024 to fully recover from the coronavirus pandemic's scars, forcing the BOJ to maintain its massive stimulus beyond Governor Haruhiko Kuroda's term ending in April 2023, he said.

"The current stimulus won't last forever. The BOJ needs to consider (how to exit) at some point. But that won't be until 2024 or 2025," Sakurai told Reuters in an interview on Monday.

"The BOJ will have to stick to the current framework for the remainder of Kuroda's term, as Japan's economy won't recover that quickly," said Sakurai who, during his five-year stint at the board was seen as among Kuroda's closest associates.

Under yield curve control (YCC), the BOJ guides short-term interest rates at -0.1% and 10-year bond yields around 0%. It also buys huge amounts of government bonds and risky assets like ETFs to pump money to the economy.

Before stepping down in March, Sakurai took part in the BOJ's decision that month to make YCC sustainable enough to weather a prolonged battle to fire up inflation.

NO NEW STEPS NEEDED ON DORMANT YIELDS

The March review has allowed the BOJ to sustain YCC for several more years by allowing it to maintain ultra-loose policy without expanding its balance sheet too much, Sakurai said.

Among the steps was to ditch a numerical target on the pace of ETF buying, and clarifying that it would allow 10-year yields to move 50 basis points around its 0% target in hope of breathing life back to a dormant bond market.

Despite the steps, trading volume in Japan's bond market hit a near-two-decade low in May. Still, Sakurai said it was "too early" to take further steps to revitalise the market, arguing that more time was needed to see whether Japanese yields would move in response to external developments.

After tapering bond and ETF purchases, the BOJ must also come up with ways to unload its ETF holdings, Sakurai added.

The BOJ's ETF holdings has ballooned to roughly 50 trillion yen ($454 billion), making it the biggest holder of Japanese shares and drawing heat for exposing its balance sheet to excessive market risk.

One option would be to sell ETFs to households via a third-party scheme, said Sakurai.

"It's something the BOJ must consider at some point," Sakurai said on taking ETFs off its balance sheet.

"Ideally, it would be a framework that facilitates households' asset management in an ageing society, and doesn't create losses for stake-holders including the BOJ," Sakurai said.

Sakurai, who voted for Kuroda's proposals throughout his stint at the BOJ, said the two have had frequent one-on-one exchanges on issues ranging from economic theory to history.

($1 = 110.1000 yen)

(Reporting by Leika Kihara; Additional reporting by Takahiko Wada; Editing by Chang-Ran Kim and Kim Coghill)

By Leika Kihara


© Reuters 2021
All news about BANK OF JAPAN
07/30SUMITOMO MITSUI FINANCIAL : Japan's SMFG first-quarter profit more than doubles ..
RE
07/30INFORMATION DISCLOSURE BASED ON THE : The JGB Book-Entry Transfer System  [PDF ..
PU
07/30INFORMATION DISCLOSURE BASED ON THE : The BOJ-NET Funds Transfer System  [PDF 7..
PU
07/29EXCLUSIVE : BOJ policymaker sees prospects of deeper debate on price goal this y..
RE
07/28NIKKEI 225 : Down 1.4% on Wall Street Cues, Pandemic Outlook
MT
07/28NIKKEI 225 : Japan Services Producer Price Index Up 1.4% in June Year-Over-Year,..
MT
07/28NIKKEI 225 : Bank of Japan Expects Short-Term Downward Pressure on Consumption D..
MT
07/28BANK OF JAPAN : Transition of Quoting Conventions in the JPY interest rate swaps..
PU
07/28BANK OF JAPAN : Developments in Real Exports and Real Imports
PU
07/28NIKKEI 225 : Japan's Services Producer Prices Inch Up in June From May
MT
More news
Financials
Sales 2021 2 206 B 20 115 M 20 115 M
Net income 2021 1 219 B 11 116 M 11 116 M
Net Debt 2021 113 179 B 1 032 B 1 032 B
P/E ratio 2021 -
Yield 2021 -
Capitalization 29 000 M 264 M 264 M
EV / Sales 2020 64,0x
EV / Sales 2021 51,3x
Nbr of Employees 4 626
Free-Float 100%
Chart BANK OF JAPAN
Duration : Period :
Bank of Japan Technical Analysis Chart | MarketScreener
Full-screen chart
Income Statement Evolution
Managers and Directors
Haruhiko Kuroda Governor
Koichiro Kamata Head-Finance & Information Technology Development
Tomohisa Takeda Executive Director & Head-Personnel
Hiroshi Nakaso Deputy Governor, Head-Personnel & Operations
Nobuyasu Obata Manager-Compliance Group & Planning
Sector and Competitors