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BOJs Policy Review May Make ETF Buying more Flexible

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TOKYO Reuters The Bank of Japan will likely focus on measures to make its purchases of risky assets, such as exchangetraded funds ETF, more flexible as the economy comes under growing strain from a spike in COVID19 infections, a Reuters poll found.

Analysts polled also revised down their economic projection for the fiscal year ending in March on expectations a recent resurgence of coronavirus infections would dent growth.

Economic activity could stall in the worlds thirdlargest economy from pandemic curbs and the BOJ may have to look at more effective ways to achieve its 2 inflation target as renewed infections force it to maintain its massive stimulus longer, analysts said.

The central bank said last month it would undergo an examination of its yield curve control and quantitative easing policies to seek ways to make them more effective and sustainable. Its findings will be released in March while new GDP estimates will be issued at its Jan. 2021 policy meeting.

The BOJ may be thinking of correcting distortions caused by its policy that could become an obstacle for maintaining its current framework through Governor Haruhiko Kurodas term that ends in early 2023, said Izuru Kato, chief economist at Totan Research.

Asked what steps the BOJ would take when the central bank unveils its findings in March, 31 economists said the central bank would make its ETF, JREIT buying more flexible, the poll conducted between Jan. 718 showed.

Eight analysts said the BOJ would…

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