The Bank of Japan should swap its exchange-traded fund holdings for perpetual bonds to ensure that an eventual exit from stimulus doesn¡¯t upend equities, according to one of Prime Minister Fumio Kishida¡¯s advisers.
The idea would enable the BOJ to reduce its exposure to risk assets by moving them off its balance sheet in a way that doesn¡¯t trigger market turmoil, according to Ken Shibusawa, chairman of Commons Asset Management and a member of Kishida¡¯s ¡°new capitalism¡± panel.
As of the end of March, the central bank held ?51.3 trillion ($348 billion) of ETFs at market value, roughly around 7% of the market capitalization of the Japanese stock market at that point, Bloomberg data shows.
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