Bank of Japan to lose billions on ETF purchases

£15bn-23bn of losses could result in annual loss

The Bank of Japan (BoJ) is set to face its first annual loss for nearly 40 years as a result of losses in excess of £20bn on its holdings in ETFs, as reported by Reuters.

A recent rout in stock prices will negatively affect the near-¥30trn ($272bn) of ETFs held by the Japanese central bank, which doubled down on its purchases this month, raising its buying target to ¥12trn per year. Japan 'on the brink of recession': Contrarian play or value trap? It began purchasing ETFs at an annual rate of ¥1trn in 2013, when the Nikkei 225 index traded at around 12,000, rising to ¥3trn per year in 2014 and up to ¥6trn annually by 2016 in an attempt to boost economic growth. Over time, this has led the average cost of entry for the central bank to rise to 19,500,...