Some investors are cheering the Bank of Japan’s withdrawal from the stock market, even as they brace for more volatility.
The central bank didn’t buy any exchange-traded funds for an entire month of May, the first time since Gov. Haruhiko Kuroda kicked off his easing campaign in 2013. That’s prompting some in the market to believe the BOJ is getting serious in pulling back from such purchases.
Many market watchers are praising the move, saying that the BOJ’s outsized presence — it is the largest holder of Japan equities — has undermined the price discovery process and also become a hindrance to better corporate governance.