Bank of Japan’s Interventions in Japan’s Stock Markets

Japan’s central bank, the Bank of Japan (BoJ), through her version of quantitative easing program, has been bidding up her local local stock market

From Reuters, (bold emphasis mine)

Many market players also said expectations that the Bank of Japan would buy stock exchange-traded funds (ETFs) should there be sharp falls in share prices were limiting any incentive to sell aggressively.

The central bank has made about 300 billion yen's worth of such purchases since December, and has stepped up buying since the earthquake in March, as part of its asset purchase programme that includes buying of up to 900 billion yen of ETFs.

This serves as another proof that the US Federal Reserve and Ben Bernanke’s creed of supporting stock markets has been exported to Japan and is likewise further proof of the coordinated actions by central bankers globally.

Also, such actions works in the favor of the Japan’s mega banks whom holds substantial exposure to equity assets.

Almost everywhere, central bankers have prioritized the interests of the banking system

Nonetheless the Nikkei continues to wobble in the red on a year to date basis (chart from Bloomberg) despite the BoJ interventions.

Yet money spent to boost the Nikkei is money lost for productive uses.