The BOJ had their March interest rate decision meeting earlier. As expected, the central bank left rates unchanged at -0.1%. As the majority stockholder in much of the Japanese stock market, how can the BOJ continue to justify continued ETF buying as the Nikkei and Topix are at levels not seen since the 1990s? Yet with continued need for monetary stimulus due to the coronavirus, the BOJ needed to walk a fine line between doing “something” and still showing a strong stance for providing accommodative monetary policy.
With the tremendous amount of stimulus over the last 20 years from the BOJ, Japanese data matters very little in terms of affecting the price of the Nikkei or the Yen. However, if the Nikkei continues to rise with other stock markets around the world, the BOJ may be forced to do more, although they don’t want to!
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