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In Record Japan Stock Rally, the BOJ Is Sitting on Its Hands

  • Nikkei 225 rose for 16th day on Tuesday, longest run ever
  • Central bank dramatically reduced ETF buying in October
People enter the Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Wednesday, Sept. 13, 2017. The BOJ's next monetary policy meeting is scheduled for Sept. 21. The central bank pushed back in July the projected timing for reaching its 2 percent inflation target for the sixth time as economic growth failed to drive price gains.
Photographer: Akio Kon/Bloomberg
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Japanese stocks’ record rally is so powerful that one of their most prominent buyers is sitting on the sidelines.

The Bank of Japan, which props up the equity market by investing in exchange-traded funds, has dramatically reduced its buying in October. That comes as the Nikkei 225 Stock Average boasts a 16-day winning streak, the longest run in history. The BOJ has spent 18 billion yen ($158 million) on ETFs so far this month, compared with an average monthly purchase of 505 billion yen in 2017.