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Bank Of Japan Buying Power Runs Dry: "If They Don't Increase Now, It's Going To Be A Shock!"

Tyler Durden's picture




 

Since 2010, The Bank of Japan has 'openly' - no conspiracy theory here - been a buyer of Japanese stock ETFs. Their bravado increased as the years passed and Abe pressured them from their independence to 'show' that his policies were working to the point that in September 2014, The BoJ bought a record amount of Japanese stock ETFs taking its holdings to over 1.5% of the entire market cap, surpassing Nippon Life as the largest individual holder of Japanese stocks.

Having stepped in a stunning 76% of days to ensure the market closed green, it appears, as Bloomberg reports, time (or money) is running out for Kuroda and the BoJ having spent 78 percent of its allotment as of Sept. 7. "They've only got a little bit left in their quota," notes one trader, "The BOJ had a big role in supporting the market," he implored, "if they don’t increase purchases now, it’s going to be a shock."

 

 

 

As Bloomberg reports,

On Sept. 8, as the stock market slumped, investors were surprised to find the Bank of Japan, normally a buyer of exchange-traded funds on the Tokyo bourse, absent.

 

What happened? The central bank, which is authorized to purchase about 3 trillion yen ($25 billion) in equity ETFs a year, is running out of ammunition, having spent 78 percent of its total as of Sept. 7. Because the BOJ usually buys on days the market falls, it sped up amid a rout in the Topix index.

 

Now it must slow down for the rest of 2015 or increase its allotment, according to Mitsubishi UFJ Morgan Stanley Securities Co.

 

...

 

“They’ve only got a little bit left in their quota,” said Seiji Arai, a strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “I think they’ll vow to increase yearly purchases by 1 or 2 trillion yen in October.”

 

With just 670 billion yen to go until its limit, the central bank has shrunk the amount it buys each time by 15 percent from its first purchase of the year to 31.7 billion yen in September. It stuck to that amount with a purchase on Thursday.

 

As the Topix recorded its worst monthly loss since 2012, the central bank purchased 302 billion yen in ETFs. Without that, the rout would have been much worse, according to Arai.

As he concludes - so perfectly summing up the farce that so many call "markets"...

“The BOJ had a big role in supporting the market,” he said. “If they don’t increase purchases now, it’s going to be a shock.”

 

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Fri, 09/11/2015 - 19:05 | 6537981 Tinky
Tinky's picture

It never gets old:

 

BOJ officials used to be cautious about purchasing ETFs, worried that it could distort market activities and put the central bank’s own financial health at risk. But under pressure from politicians following the global financial crisis, the bank changed its stance in late 2010.

“We led the cows to water, but they didn’t drink it, even though we told them it tasted good,” Miyako Suda, who was a board member then, wrote in a 2014 book discussing monetary easing at that time. “So we thought we should drink it ourselves, showing them it was tasty.”

Fri, 09/11/2015 - 19:07 | 6537985 Looney
Looney's picture

Abe, like Prince, should change his name to a sign –  %. ;-)

Looney

Fri, 09/11/2015 - 19:10 | 6537998 OC Sure
OC Sure's picture

Most accurately, just change it to "counterfeiter?"

Fri, 09/11/2015 - 19:13 | 6538006 remain calm
remain calm's picture

Hey, Kuroda (BOJ). While your looking for tasty things, why don't you lick my balls?

Fri, 09/11/2015 - 19:15 | 6538014 Beam Me Up Scotty
Beam Me Up Scotty's picture

I thought their printer was already set to ramming speed!?!?!?  You mean they have to print MOAR FASTER??

Fri, 09/11/2015 - 19:17 | 6538022 OC Sure
OC Sure's picture

Print what?

Fri, 09/11/2015 - 20:12 | 6538155 newbie vampire
newbie vampire's picture

"Print what?"

3D electronic digits.

Sat, 09/12/2015 - 07:25 | 6539079 SoilMyselfRotten
SoilMyselfRotten's picture

We are 9 months into a 12 month year, they have spent 78% to date and they are almost out of ammo? How much are they off pace for the year, 2%? Those MFers have plenty left to affect markits.

Fri, 09/11/2015 - 19:35 | 6538074 MalteseFalcon
MalteseFalcon's picture

I don't suppose that someone has a third nuke to drop on the BOJ?

It would be for the children.

Fri, 09/11/2015 - 23:13 | 6538666 Lets Buy The Dip
Lets Buy The Dip's picture

haha. THis BOJ conjob, keep getting everyone tricked. Doesnt it?

Abenomics, is not effing working. 

I think I stick to the US market, nothing is growing faster and has more profits than the US markets right now.

And have a look at the AAPL chart ==> http://www.bit.ly/1fMcakI  It looks effing awesome, if you are a LONGER TERM INVESTOR?

Remember SEPTEMBER are known to be BULL killers if you look back the LAST 50 years. 

For now their game is get everyone short, TRAP THEM and then take us up higher!! yes that old chest nut.  Fool me once, shame on you. Then....fool me twice SHAME ON ME!

Fri, 09/11/2015 - 19:13 | 6538007 Looney
Looney's picture

This just in!!!


ABE: WE ARE ABOUT TO RUN DRY

KURODA: DO I STILL HAVE TO SWALLOW?

ABE: BANZAI!!!  ;-)

Looney

Fri, 09/11/2015 - 19:08 | 6537988 OC Sure
OC Sure's picture

Did they purchase with money? Or did they purchase with "printed money?" What is the difference?

Fri, 09/11/2015 - 19:49 | 6538110 Manthong
Manthong's picture

No money was involved.. only electronic artifacts of currency.

Fri, 09/11/2015 - 21:28 | 6538364 rwe2late
rwe2late's picture

 It would appear then,

based on your statement,

that more digital Yen to use in purchases could most readily

be "authorized".

 

What's a few quadrillion more or less?

Fri, 09/11/2015 - 22:04 | 6538524 Manthong
Manthong's picture

..in an F'n oriental heartbeat.

Fri, 09/11/2015 - 19:15 | 6538003 remain calm
remain calm's picture

When does this insanity stop? I can't believe that people with any level of common sense can't look at this and say, "this is fucked up".

Fri, 09/11/2015 - 19:20 | 6538028 OC Sure
OC Sure's picture

Which of your senses is so common as to identify a thing that is not that it is?

Fri, 09/11/2015 - 19:52 | 6538121 Manthong
Manthong's picture

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

-Henry Ford

Fri, 09/11/2015 - 20:53 | 6538251 algol_dog
algol_dog's picture

It is fucked ...  But if central banks are going to buy stocks, then I will be happy to be on the other end and take a profit. It's lunacy that a homeless person can't get a buck to barely feed himself, yet they give money by the billions away to people in the markets. Go figure ...

Fri, 09/11/2015 - 23:01 | 6538637 sun tzu
sun tzu's picture

Then they bitch about the wealth gap that they created

Fri, 09/11/2015 - 19:24 | 6538044 JoeySandwiches
JoeySandwiches's picture

Shouldn't it be worth mentioning in this article that they're running out of bonds to monetize?

Hell, it seems possible that IF rates rise and shake global markets, it could cost a couple years of stock allotments to keep the Nikkei green.

Fri, 09/11/2015 - 20:34 | 6538204 newbie vampire
newbie vampire's picture

"Shouldn't it be worth mentioning in this article that they're running out of bonds to monetize?"

If they make me Minister of Finance, I will ensure perpetual prosperity.

TWO OPTIONS

1.  Resurrect any absolutely bankrupt govt. owned corporation.  Use it to issue AAA rated govt. bonds with an implicit govt. guarantee.  A continual issue of USD 100 billion each month and Japan can have all the inflation it needs.  Use the funds to build a bridge or 8 lane highway to Alaska.

2.  Start a shooting match with the Chicoms.  Build more planes, tanks, ships, adult incontinence pants etc etc

When one is already way past bankrupt.  Why worry about paying ?

Perpetual Prosperity is here to stay.

Fri, 09/11/2015 - 19:05 | 6537982 OC Sure
OC Sure's picture

If printing money is possible, why does not ZH do it? 

What is it about a nation that makes "printing money" so possible?

Fri, 09/11/2015 - 19:10 | 6538000 Slurm
Slurm's picture

A larger standing army and police force than yours.

Fri, 09/11/2015 - 19:12 | 6538004 OC Sure
OC Sure's picture

 

 

Then, money comes from force?

Fri, 09/11/2015 - 19:21 | 6538036 LeBalance
LeBalance's picture

the farce is strong in this one.

Fri, 09/11/2015 - 19:30 | 6538061 OC Sure
OC Sure's picture

Counterfeit comes from farce. 

Money cannot come from farce.

 

Until this is understood,

 

Tyler Durden is Kevin Henry's soulmate. 

Fri, 09/11/2015 - 21:44 | 6538448 Fish Gone Bad
Fish Gone Bad's picture

Start here: Money is debt

https://www.youtube.com/watch?v=jqvKjsIxT_8

Money buys political power and the ability to control more money.  Controllling political power allows one to control the military and the police.

Fri, 09/11/2015 - 19:57 | 6538128 Redneck Hippy
Redneck Hippy's picture

But if you printed enough money you could hire an army and a police force.

Fri, 09/11/2015 - 23:12 | 6538660 sun tzu
sun tzu's picture

They'll kill you before you could print enough money

Fri, 09/11/2015 - 19:18 | 6538025 km4
km4's picture

"If They Don't Increase Now, It's Going To Be A Shock or perhaps Seppuku https://en.wikipedia.org/wiki/Seppuku

Fri, 09/11/2015 - 19:20 | 6538027 LeBalance
LeBalance's picture

word like

"quota"

and

"limit"

are fucking

funny

to

a

central banker.

Fri, 09/11/2015 - 19:23 | 6538040 hotrod
hotrod's picture

Commodity stocks that have been crucified should sue. 

Fri, 09/11/2015 - 19:47 | 6538103 yogibear
yogibear's picture

The Central banks just figure that subscribing 200 ounces or more for every ounce of gold is very proitable and maniplative.

No limit to the bankster schemes.

Fri, 09/11/2015 - 19:27 | 6538055 Kavklov
Kavklov's picture

Just print more moneyyyy!!!

 

Better just 0101010101 and vou la money is created!!!

Fri, 09/11/2015 - 19:30 | 6538062 QQQBall
QQQBall's picture

Quota? Bitch - fire up FuckUshima and control P!

Fri, 09/11/2015 - 19:36 | 6538078 yogibear
yogibear's picture

They'll just keep printing until the Yen croaks. 

Same for the US.

The Federal Reserve is guidng both countries.

Round-robin of buying each other's debt.

The only one that loses are those living on fixed incomes.

Fri, 09/11/2015 - 20:07 | 6538142 Atomizer
Atomizer's picture

Ask Obama to send a thermo nuclear drone to stop Fukushima. The carry trade will booster. 

Fri, 09/11/2015 - 20:56 | 6538259 I woke up
I woke up's picture

Maybe he questioned is ability to fly

Fri, 09/11/2015 - 20:57 | 6538260 nosam
nosam's picture

Printing money to buy stock has so many benefits for the NWO,

1. It devalues the currency so the ordinary people are enslaved.

2. Control of the big corporations falls into the hands of the government.

3. When they decide to finally let the stock market crash, individual investors and pension funds are wiped out forcing them into the hands of government.

Why wouuldnt they do it? It fits into their plans perfectly.

Fri, 09/11/2015 - 21:04 | 6538284 buzzsaw99
buzzsaw99's picture

either the sheep give their money to the maggots or the boj will.

Fri, 09/11/2015 - 21:31 | 6538330 coast
coast's picture

time for a global monetary reset....and I read another post earlier but didnt have time to respond...He said that the U.S. wanted Europe to die because they were a threat to U.S. global government....WRONG!   Those in power run both europe and the U.S.   Even Lindsey Williams predicted they would take down Europe before they took down the U.S.  And its happening.  Fukishima was planned by the western bankers, because Japan was starting to wise up and not take orders from the western bankers. The western bankers want to destroy the world so they can take control and they are eugenicists and love killing people......Most of you just dont get it do ya?  You will get it soon when it hits ya....I guarantee it.  I just dont know when, but I know what is coming.  And any of you that dont realize that the western bankers, aka: zionist money changers, did not plan 911, you are insane, and stuck in stockholm syndrome.  And quit putting down jews because it goes deeper than that.  Learn history, or shut up.  research kahzars.  Rothchilds own most of the world and NATO.  Satan took Jesus on a mountain, and showed him all the kingdoms. Satan told Jesus that He could have it all if He just bowed down and worshipped him.  Jesus said NO!.....The Rothchilds said "pick me, pick me!"  Just an analogy, but its my point in laymans terms.

EDIT:  the rothchilds also control the vatican and the pope.

Fri, 09/11/2015 - 21:22 | 6538345 Central Ohio
Central Ohio's picture

Article from Seeking Alpha by Lawrance Fuller, 1/11/15.

Is the Fed Buying Stocks?

 

"My roadmap looks like this -- the Fed would buy Treasury bonds and/or mortgage-backed securities from the primary dealers, which are Wall Street banks, and credit the accounts of the primary dealers with newly created money. The banks would then withdraw all or part of that deposit to purchase bonds from other institutions, paying those institutions with the money that was previously given to them by the Fed. That money would then be used to purchase other categories of financial assets, including common stocks. As the above chart reveals, during the periods when the Fed was not purchasing debt on a daily basis, the stock market declined. During most of last year the Fed was slowly tapering its purchases, which clearly led to a more subdued stock market performance, until it finally ended on October 31 with the S&P 500 at approximately 2000. We haven't made much headway since that time."

Fri, 09/11/2015 - 21:37 | 6538414 Brokenarrow
Brokenarrow's picture

dont kid yourself. the us will do the exact same thing as japan. it wont stop until there is a serious war between two nuclear powers. the fed wont raise rates ever. the difference between the us and japan is americans are violent. watch and see what you "never could imagine."

Fri, 09/11/2015 - 21:42 | 6538441 Name Already Taken
Name Already Taken's picture

This is coming from a country where the government is trying to boost domestic consumption...with a higher consumption tax. And you are surprised because?

Sat, 09/12/2015 - 00:13 | 6538777 Atomizer
Atomizer's picture

Unlike the lost frills of luxury car tax, new climate change tax will ride along with your new lawnmower battery pack golf cart automobile.

Fri, 09/11/2015 - 23:58 | 6538739 Atomizer
Atomizer's picture

BOJ can license Sony to manufacture a 3D printer to create moar YEN.

Seinfeld - Kramer tucking Japanese guests in drawers to ...

Sat, 09/12/2015 - 00:29 | 6538799 homiegot
homiegot's picture

Cuddlefish.

Sat, 09/12/2015 - 04:29 | 6539007 Element
Element's picture

It's been curtains for the land of the rising sun since 1990 btw.

Sat, 09/12/2015 - 08:52 | 6539179 FranSix
FranSix's picture

Liquidity trap, hey?

Sat, 09/12/2015 - 09:11 | 6539205 Phillyguy
Phillyguy's picture

Keeping the Nekkei up is only one of Japan’s headaches. No one in the Government or industry (TEPCO) wants to discuss the other “elephant in the room”, the meltdown at the Fukushima Daiichi Nuclear Power Plant- the disaster that keeps on giving. Clean up has barely begun and will cost $ hundreds of billions. Does Abe think that if he ignores this problem, it will magically disappear?

Sun, 09/13/2015 - 12:25 | 6542265 khakuda
khakuda's picture

Let's hope their buying power runs dry, but I'm afraid it won't. People should just view this for what it is. This is the government stealing the assets and hard work of individuals and expropriating it for themselves.

Slowly but surely, they are creating Fiat currency out of thin air and exchanging it for assets of real value. The end result is that the people who created the value end up owning worthless paper and the people who created worthless paper end up owning real value.

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