Nikkei Index Rises 3%... "Reflecting Bank of Japan ETF Purchases"

On the 21st, a citizen is looking at the Nikkei index board on a street in Tokyo, Japan. [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Concerns over tightening discussions have eased, and the Japanese stock market mostly offset the previous day's decline following the Bank of Japan's decision to additionally purchase exchange-traded fund (ETF) assets.

On the 22nd, the Nikkei 225 index on the Tokyo Stock Exchange closed at 28,884.13, up 3.12% (873.20 points) from the previous trading day. The TOPIX index ended the session at 1,959.53, rising 3.16% (60.08 points).

This largely offset the Nikkei index's 3% drop the previous day and marked the largest increase so far this year.

This rebound appears to reflect the previous day's recovery in the U.S. stock market.

On the 21st, the Dow Jones Industrial Average, one of the major U.S. indices, rose by 1.5%.

Additionally, the Bank of Japan, Japan's central bank, decided to make an additional purchase of ETF assets for the first time in two months, which also influenced the market.

Earlier, on the 21st, the Bank of Japan purchased ETFs worth 70 billion yen (approximately 7.2 billion KRW). As the Japanese stock market plunged more than 3% due to concerns over U.S.-originated tapering (reduction of asset purchases), it is interpreted that the Bank of Japan directly intervened to calm market anxiety.

The Nihon Keizai Shimbun analyzed, "As the Bank of Japan expands asset purchases, the market is stabilizing again."

A senior strategist at Nissay Research said, "The Japanese stock market overreacted to tightening concerns the previous day," adding, "(Today's rebound) is a market readjustment."

He further noted, "Nevertheless, market instability remains, and it is uncertain whether today's rebound signifies a shift to an upward trend."

This content was produced with the assistance of AI translation services.