To Neverland And Beyond.

In case you had any doubts about whether the BoJ’s efforts to send Japanese stocks to infinity and beyond were effective, have a look at this:


So that’s Nikkei 20,881.27, which would be the highest level since December 5, 1996.

“A gradual upward trend in equities is being sustained on solid economic and market conditions,” Seiichi Suzuki, a market analyst at Tokai Tokyo Research Institute imagined on Wednesday.

Yes, “on solid economic and market conditions.”

Hopefully, Suzuki includes “BoJ ETF buying” in “market conditions,” because the idea that what you see in that chart has nothing to do with what you see in the two charts below is clearly ridiculous:


Note that works two ways: 1) when you print trillions and buy stocks with it, those stocks tend to go up, and 2) when you print trillions out of thin air it tends to put pressure on your currency, and the weaker the yen, the higher Japanese stocks.

Now recall the following soundbites from Kuroda over the summer and don’t forget to laugh:

  • Bank of Japan Governor Haruhiko Kuroda says BOJ’s ETF buying isn’t aimed at stock prices.
  • Kuroda: BOJ isn’t committed to level of stocks or their moves
  • Kuroda: BOJ’s ETFs are a small proportion of overall equity market
  • Kuroda: BOJ’s ETF holdings aren’t harming corporate governance
  • Kuroda: BOJ won’t speak at company shareholder meetings

With the upcoming snap election not expected to usher in any near-term changes in BoJ policy irrespective of the result, we suppose it’s to Neverland and beyond for Japanese equities.

Spot the central banker who isn’t worried…



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