> Surprised at the lack of comment on the historical precedent of Japanese
> Central Bank buying equity shares from Japanese banks. Is it just a goofy
> stop-gap scheme or is it a national move to stop foriegn money from buying
> up Japanese assets at under-valued prices, or is it something else entirely?
The BOJ is offering to buy, but it seems it hasn't worked out a commitment from the banks to sell shares.
http://www.morganstanley.com/GEFdata/digests/20020919-thu.html#anchor1
Maybe it is the cross-holding of shares by banks which makes an offer by an honest broker, the BOJ, to all banks simultaneously, attractive. It may be a way to pull these off the balance sheets without setting off a crash (yes, I guess they could go lower...) in share prices.
The cross-holdings have traditionally functioned as financial hostages and were stabilizing, but they've become a source of instability as prices have cratered.
I don't see how the BOJ can do this without doing further damage to its own balance sheet. Japan's PKO justs keeps on going, and the market keeps dropping.
Chris