The Bank of Japan (BOJ), on March 19, released the results of its monetary policy review, in which some of its existing easing measures were revised. According to the QUICK Monthly Survey (Equity) for April, opinions were divided over BOJ’s ETF purchase plan. 48% of the respondents said that “Should not continue to purchase”, expressing apprehension regarding “Difficult exit strategies” (Asset Management). Out of the 49% who approved of the purchase, 35% chose “Desirable to purchase at a smaller than the current scale.” and 14% chose “Desirable to continue to purchase.” It is said that “The continued purchase by the central bank can help uplift the investor sentiment when there is a sharp drop in the stock prices owing to the reasons such as the spread of the new strains of the Coronavirus” (Bank).
BOJ declared that it would purchase only the TOPIX-linked ETFs. The decision seems to be favorably received by market participants, 67% of whom said it was “desirable.” As for the impact of the decision on market pricing, 54% of the respondents chose, “It would be favorable to reduce distortions in the pricing of overvalued stocks,” whereas 13% chose, “It would be favorable to reduce the impact on the overall market.” On the other hand, 13% chose, “The decision is not desirable because it may widen the distortions in the pricing of small and illiquid stocks.”
The forecasts for the TOPIX and the Nikkei 225, which are surveyed every month, were revised upward from the March forecasts. At the end of April, the twelfth consecutive month of increase, the TOPIX is expected to be 1973.41 as calculated by the unweighted average. BOJ’s continued purchase of TOPIX-linked ETFs is also likely to provide a tailwind.
The survey was conducted 210 participants, including investment managers at domestic institutional investors, and 130 responded. The survey was conducted during March 30 – April 1, 2021.
QUICK Data Factory（QUICK Monthly Survey）