After yesterday’s FOMC action and Ben Bernanke’s Op/Ed in the Washington Post essentially stating the Fed is targeting the stock market, we now get the Bank of Japan’s outline for asset purchases. Next week the BoJ begins buying Nikkei and Topix ETFs.
We think today’s $50 gap up in the gold price will become commonplace as the lack of confidence in fiat currencies accelerates. This is from Friday’s Bank of Japan Statement on Monetary Policy,
1. ETFs and J-REITs to Be Purchased
(1) ETFs whose prices track the Tokyo Stock Price Index (TOPIX) or the Nikkei 225 Stock Average.
(2) J-REITs that are rated AA or higher and for which there are no concerns regarding their creditworthiness.
(3) In addition, purchase and sale of J-REITs shall have been transacted on a financial instruments exchange 200 days or more per annum, with a total trading value of 20 billion yen or more per annum.
(1) The Bank will purchase ETFs and J-REITs as trust property through a trust bank that the Bank appoints as trustee.
(2) Purchases of ETFs and J-REITs shall, taking into account the conditions in the market, be conducted by the trustee pursuant to a standard prescribed by the Bank.
Click here for the full BoJ Statement on Monetary Policy.