Bank of Japan may have a new pattern when buying stocks

The regulator has said it may buy up to $112b (JPY12t) in ETFs a year.

The Bank of Japan (BOJ) may have adopted a new standard in deciding when to support stocks, reports Bloomberg, according to their correspondence with Seiichi Suzuki, a market analyst at Tokai Tokyo Research Institute Co.

Whilst market consensus has it that the BOJ purchases ETFs when the Topix index falls at least 0.5% during the morning session, recent buying patterns have changed, noted Suzuki.

“The bar for ETF purchases has been lowered to a drop of 0.25% on a day when the stock gauge has fallen for a second consecutive session,” Suzuki said. “This is to prevent any steep declines in stock prices” regardless of the pace of their ETF purchases, he added.

The central bank has said it may buy up to $112b (JPY12t) in ETFs a year, though in principle its target is $56b (JPY6t). The Bank of Japan declined to comment.

Here’s more from Bloomberg.