Insights
Can Japan Bring the Money Back Home
(Aug 26) Peter considers how the Bank of Japan’s hoard of riches could be returned to public hands in a far swifter manner.
- Prime Minister Takaichi has set out bold long-term spending plans to stimulate industries deemed vital to national security
- By way of support, Minister of Finance Katayama has suggested tilting Government Pension Investment Fund’s (“GPIF’s”) asset allocation in favour of domestic securities
- He is also considering tax breaks on purchases of Japanese government bonds undertaken via the Nippon Individual Savings Account (“NISA”) savings scheme
- A better approach would be to offer the Bank of Japan (“BoJ’s”) Nikkei and TOPIX Exchange-Traded Fund (“ETFs”) through the NISA platform at discounts proportionate to the length of holding
- Such a methodology would be akin to one adopted by the Hong Kong Monetary Authority (“HKMA”) when it returned stocks purchased during the Asian Financial Crisis to the public
- Doing so would accelerate the very slow sales process that is underway and allow the BoJ to divest itself of its hoard of riches
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