BOJ plan to fix ETF problem branded 'meaningless gesture'

The Bank of Japan's proposed lending facility for its exchange-traded fund buying program won't help fix the more pertinent issue that's curbing overseas investors' faith in the country's equity market — central bank domination of the ETF industry.

That's the view of Jesper Koll, Japan-based senior adviser with WisdomTree Investments Inc., a provider of exchange-traded products. The plan, which would temporarily allow the BOJ to lend ETFs to market participants, was a "meaningless gesture," Koll said in a phone interview. What money managers really need is detail on how the central bank intends to eventually wind down its ETF holdings, he said.

"It's a giant yawn," said Koll, who has also been critical of the BOJ's ETF program in the past. "It doesn't give me a new tool, it doesn't solve any problems or answer any questions."