Skip to content
More from
Bloomberg
Fixed Income
relates to Asia Stocks Drift; Bonds Steady After Fed Minutes: Markets Wrap
relates to Rates Traders Are Left With Questions as Fed Signals End to Runoff relates to Fed Hints a Bias Toward Hiking Endures as Balance-Sheet Rolloff Nears End relates to Five Things You Need to Know to Start Your Day relates to Fed Minutes Show Officials Unsure on Need for Rate Hikes in 2019 relates to Stocks Edge Higher After Fed Minutes; Bonds Fall: Markets Wrap relates to The Policies That Will Decide Who Wins Indonesia’s Election relates to Indonesia Decision Day Guide: Rupiah Reprieve Offers Room to Breathe relates to Illinois Turns Warily to Bonds to Plug $134 Billion Pension Hole relates to Clarida Says Fed May Decide Soon on Timing of Asset-Runoff End relates to Asia Stocks Drift; Bonds Steady After Fed Minutes: Markets Wrap
relates to Rates Traders Are Left With Questions as Fed Signals End to Runoff relates to Fed Hints a Bias Toward Hiking Endures as Balance-Sheet Rolloff Nears End relates to Five Things You Need to Know to Start Your Day relates to Fed Minutes Show Officials Unsure on Need for Rate Hikes in 2019 relates to Stocks Edge Higher After Fed Minutes; Bonds Fall: Markets Wrap relates to The Policies That Will Decide Who Wins Indonesia’s Election relates to Indonesia Decision Day Guide: Rupiah Reprieve Offers Room to Breathe relates to Illinois Turns Warily to Bonds to Plug $134 Billion Pension Hole relates to Clarida Says Fed May Decide Soon on Timing of Asset-Runoff End relates to Asia Stocks Drift; Bonds Steady After Fed Minutes: Markets Wrap
relates to Rates Traders Are Left With Questions as Fed Signals End to Runoff relates to Fed Hints a Bias Toward Hiking Endures as Balance-Sheet Rolloff Nears End relates to Five Things You Need to Know to Start Your Day relates to Fed Minutes Show Officials Unsure on Need for Rate Hikes in 2019 relates to Stocks Edge Higher After Fed Minutes; Bonds Fall: Markets Wrap relates to The Policies That Will Decide Who Wins Indonesia’s Election relates to Indonesia Decision Day Guide: Rupiah Reprieve Offers Room to Breathe relates to Illinois Turns Warily to Bonds to Plug $134 Billion Pension Hole relates to Clarida Says Fed May Decide Soon on Timing of Asset-Runoff End
Photographer: Kiyoshi Ota/Bloomberg
markets

Japan Stocks May Suffer Dividend Hit After BOJ ETF Buy Binge

Updated on

Japan Stocks May Suffer Dividend Hit After BOJ ETF Buy Binge

  • Funds may unwind futures ahead of payouts, Tokai Tokyo says
  • Largest impact may be seen before dividends due next week
Images of Electronic Stock Boards As Nikkei and Topix Index Edge Up
Photographer: Kiyoshi Ota/Bloomberg

The Bank of Japan’s massive purchases of exchange-traded funds may have an unintended negative impact on stocks this week.

The nation’s ETF market has swollen almost 13 times to 33 trillion yen ($297 billion) since the BOJ began buying the instruments in 2010, according to data from the Investment Trusts Association of Japan. BOJ Governor Haruhiko Kuroda accelerated ETF purchases to about 6 trillion yen annually in 2016 in his effort to promote inflation.

Amid this influx of cash, the number of listed ETFs has more than doubled to 180 in the past eight years. With a number of the biggest funds set to make annual dividend payments soon, their managers may be poised to unwind related futures positions and could also sell off some holdings in order to help raise cash.

“The market is staying alert to a possible sell-off related to ETF dividend payout,” said Makoto Sengoku, a market analyst at Tokai Tokyo Research Institute Co. “It’s a trade-off for the Japanese stock market as the BOJ keeps on buying ETFs.”

Ballooning

Tokai Tokyo Research estimates the three biggest domestic managers, Nomura Asset Management Co., Daiwa Asset Management Co. and Nikko Asset Management Co., will pay about 400 billion yen in dividends on ETFs linked to the Topix index or the Nikkei 225 Stock Average this year, up from about 280 billion yen in 2017.

The dividend payment dates are listed as either July 8 or 10 for each of the six largest Japanese ETFs, which together account for nearly 80 percent of the total market, according to Bloomberg data. The Topix index fell 0.3 percent in the week ended July 7 last year and dropped 3.6 percent in the week ended July 8, 2016. The benchmark gauge has started this week with a 2.2 percent, two-day decline.

(Updates with share prices in sixth paragraph.)