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Have the Purchases of ETF Raised Stock Prices? Recent Japanese Case

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Listed:
  • Yutaka Kurihara
  • Shinichiro Maeda
  • Akio Fukushima

Abstract

The Japanese central bank, the Bank of Japan (BOJ) has introduced a drastic and unprecedented quantitative easing (QE) policy to combat deflation from the 2000s. The BOJ has purchased exchange-traded funds (ETF) as well as huge amounts of domestic governments bonds. This paper investigates the effect of ETF purchases by the BOJ on Japanese stock prices. Empirical results show that the purchases were conducted to prevent decreasing stock prices, however, whether the purchases directly promoted stock prices rising or not is uncertain in the short-run. On the other hand, as stock prices have been increasing since then, the purchases made situations such as preventing a decrease to stock prices and promoting prices in the long-run.

Suggested Citation

  • Yutaka Kurihara & Shinichiro Maeda & Akio Fukushima, 2021. "Have the Purchases of ETF Raised Stock Prices? Recent Japanese Case," Bulletin of Applied Economics, Risk Market Journals, vol. 8(1), pages 109-119.
    • Handle: RePEc:rmk:rmkbae:v:8:y:2021:i:1:p:109-119
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    References listed on IDEAS

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    More about this item

    Keywords

    Bank of Japan; ETF; stock price;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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