Japanese Stock Market Rally... "Bank of Japan's ETF Valuation Gains Alone Reach 305 Trillion Yen"

The valuation gains on exchange-traded funds (ETFs) held by the Bank of Japan are estimated to amount to approximately 34 trillion yen (about 305 trillion won).

According to a report by Nihon Keizai Shimbun (Nikkei) on the 10th, Shingo Ide, a researcher at Nissei Basic Research Institute under Nippon Life Insurance, estimated that as of the end of February, the market value of ETFs held by the Bank of Japan was about 71 trillion yen, with valuation gains reaching 34 trillion yen.

Previously, the market value of ETFs held by the Bank of Japan, as of September last year, was 60.6955 trillion yen. The valuation gains compared to the book value (37.116 trillion yen) were 23.5794 trillion yen.

The Japanese stock market has recently been strong, with the Nikkei 225 average price index (Nikkei Index), the representative stock index, surpassing the 40,000 mark for the first time in history on the 4th. The Bank of Japan began purchasing domestic ETFs along with government bonds starting in 2010, at one point buying as much as 6 trillion yen annually.

The Bank of Japan's ETF purchases have effectively supported the Japanese stock market that comprises the ETFs. It is rare to find a central bank implementing a monetary policy that involves purchasing stocks.

Recently, it has been reported that the Bank of Japan holds more Japanese stocks through ETFs than the Japanese stocks held by the Government Pension Investment Fund (GPIF), the independent administrative institution that manages and operates Japan's major public pension assets.