TOKYO (Reuters) – Bank of Japan (BOJ) shares hit their highest trading level for the third session on Wednesday, in the latest example of how too much liquidity can attract retail investors to a trade that is seems reckless.
Shares in the BOJ, one of the few central banks with a listed stock, traded up 17% to 47,000 yen ($ 439.80) to reach their highest levels since May 2018.
So far this week, central bank shares have risen 68%, which equates to volatile cryptocurrencies and select meme stocks run by U.S. retail investors.
The price spiral has left professional stock analysts scratching their heads, as they say there are no underlying reasons to confirm the trend.
The Japanese government owns 55% of the shares held by the BOJ, which are traded on the JASDAQ course for small companies. The BOJ does not aim to make profits, its shares do not have voting rights, shares are limited and volumes are very low because they cannot be traded electronically.
“The trend in BOJ shares is just based on profitability. It moves just like bitcoin, ”said Koichi Kurose, chief strategist at Resona Asset Management.
“This means that investors with a lot of money are on the hunt for anything new, based on the topic of the day. They are buying BOJ shares due to the recent market surge. ”
A BOJ spokesman declined to comment on stock price movements.
The rally in BOJ shares comes just weeks before the central bank reviews its monetary policy.
The central bank is expected to rebound broadly on buying trading currencies (ETFs), which some critics say have pushed up prices in the stock market.
Japanese social media was kept up with posts about Governor Haruhiko Kuroda’s announcement in January that the BOJ’s ETJ holdings appeared to be making unrealistic profits of around 12-13 trillion yen as a result of a large rally in stock Tokyo.
Japanese shares have climbed to unprecedented heights from the asset bubble economy in the late 1980s, with the Nikkei index returning the 30,000 mark last month in terms of expectations for a rapid economic recovery. from the coronavirus pandemic.
A stock analyst suggested that some investors may buy BOJ shares for the corporate stock certificate as a reminder of the 2020s era of moderately easy bank money and high yields.
The analyst, who declined to be quoted, said that the current rise reminded him when the profitability of BOJ stock sales pushed to a high of 755,000 yen in 1988, and that sentiment is now as brutal as it had been for decades.
“BOJ shares may have risen on earnings but the bank’s business goal is not to post profits, its purpose is to stabilize BOJ notes,” Hiroyuki Kubota, financial analyst, tweeted .
“We need to be careful that BOJ shares attract speculative money,” Kubota said.
Resona’s Kurose warned that a fall in BOJ shares could slow the market’s decline.
“After all the BOJ episodes have no content. Shareholders do not have the right to seek higher returns, ”he said.
($ 1 = 106.8700 yen)
Reciting with Junko Fujita; Edited by Vidya Ranganathan and Jacqueline Wong