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Japanese Stocks Plunge As Nikkei Takes Out 20,000, Falls Into Bear Market

This isn't the best news for the BoJ.

This isn't the best news for the BoJ.
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3 comments on “Japanese Stocks Plunge As Nikkei Takes Out 20,000, Falls Into Bear Market

  1. Kuroda get out there and hit the bid!

  2. Is it possible (legal) for the BoJ to sell equity back to the issuing corporation privately, effectively retiring the shares?

    • Yes it is legal. Technically, the BoJ is buying ETFs from asset management companies. The central bank does not own the shares its buys through ETFs directly. If/when the BoJ sells, it will sell ETFs or ask the asset manager to unwind the ETF shares. Legally, it is the asset management company that will (likely) sell the underlying shares back to the issuer who will either hold them as treasury stock or cancel the shares. Most Japanese companies do not immediately cancel treasury stock but hold it on their books for a time and either resell the shares to the public or eventually cancel them. Good question, Captain.

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