TOKYO (Reuters) – The Bank of Japan may put in place some numerical guidelines for buying futures currencies (ETFs) with a promise to ramp up buying when markets come volatile, three sources familiar with its thinking said.
The move would allow the BOJ to make slower purchases when markets are stable, while at the same time reassuring investors that it will step in strongly when shock events trigger a recession, he said. them.
While there is no consensus on the final decision, the idea is among options to emerge within the BOJ ahead of a review of its policy instruments due in March, the sources told Reuters.
The BOJ will conduct the review at next month’s policy meeting to make their major stimulus program “more sustainable and effective,” as COVID-19 pandemics increase the prospect of a long-term struggle to regenerate the economy.
The BOJ has been buying ETFs for a decade as part of efforts to pull Japan out of deregulation.
It now promises to buy ETFs at an annual rate of about 6 trillion yen ($ 56.7 billion) and up to 12 trillion yen, a promise that will keep them buying even when stock prices thrive.
($ 1 = 105.7400 yen)
Reciting with Leika Kihara and Takahiko Wada; Edited by Toby Chopra