In today’s briefing:
- The Bank of Japan Should Also Accelerate Its ETF Sales “to Avoid Impacting the Market”
The Bank of Japan Should Also Accelerate Its ETF Sales “to Avoid Impacting the Market”
- Japan’s stocks are notable for low trading liquidity due to relatively small market capitalization and skewed investor-base. Many companies have major shareholders, and BoJ’s ETF further limit the free-floating shares.
- Trends in derivative positions—such as the “gamma squeeze” strategy—that utilize the Nikkei 225, which includes stocks with low trading liquidity, are further amplifying the magnitude of market volatility.
- The BoJ’s ETF holdings pose a major problem in corporate governance, perspective and it should now accelerate the sale of ETFs to ensure trading liquidity and “avoid impacting the market.”
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