Japan Govt May Ask BOJ to Buy ETFs

Tokyo, Feb. 26 (Jiji Press)--Japan's government and ruling
coalition are mulling asking the Bank of Japan to buy exchange-traded funds
that are linked to stock indexes of the Tokyo Stock Exchange from financial
institutions and the market, Jiji Press learned Wednesday.

For the envisaged scheme, which is aimed at shoring up stock
prices, the government plans to provide guarantees to prevent falls in the
value of the central bank's assets that may result from its possible ETF
purchases, sources familiar with the plan said.
The government and ruling parties are also considering having the
government-affiliated Banks' Shareholdings Purchase Corp. resume stock
buying from banks and expanding the scope of purchases by the body. Also
under study is a plan to set up a new institution to buy shares with the use
of private-sector funds.
In addition to these government-led measures, the BOJ's cooperation
is necessary so that swift action is taken to buoy up the flagging stock
market, the sources said.
A senior coalition official has suggested that a total of about 20
trillion yen should be used to buy shares.
A bill for resuming share buying by Banks' Shareholdings Purchase
Corp. is seen to be enacted as early as March 6 with the support from both
the ruling bloc led by the Liberal Democratic Party and the main opposition
Democratic Party of Japan.
A senior DPJ official said on Wednesday that the ruling and
opposition parties are close to agreeing that a supplementary resolution
calling for a study on expanding the scope of shares purchased by the
government body should be attached to the bill.