Japan plans to buy $227 billion in shares to boost market
By Michael Kitchen
8:11 a.m. EST Dec. 18, 2008
NEW YORK (MarketWatch) -- "Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported.
Under the bill, the Banks' Shareholding Acquisition Corporation, originally created in January 2002, would resume buying shares from banks and other entities, the Japanese news agency reported.
The bill would be introduced early next month "with an eye to implementing the measure by the end of March," the report quoted lawmakers as saying. The Liberal Democratic Party had intially considered just 10 trillion in stock purchases, but the size was roughly doubled to 20 trillion yen at the request of its ruling coalition partner, the New Komeito party, the report said."
Questions to ask:
-what price will the government buy at?
-what criteria will the government use to determine purchase prices?
-what proportion of the total float of Japanese stocks is owned by the government?
-what does the phrase "stock market" mean when government entities are participating?
-will this be an opportunity for foreign investors to dump their holdings of Japanese equities?
I don't know the answers to all of these questions, but I think they are worth considering.
Japan Real Time Charts and Data
Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?
