Bank Of Japan Owns Shares In 474 Companies

Economy Jamie Simon
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In an effort to stimulate the economy, the Bank of Japan, the country’s central bank, has used pre-2007 measures still becoming more extreme, culminating now with negative interest rates and even purchase of shares.

Basically, the Bank of Japan and the giant pension fund government became the largest shareholders in 474 listed companies in the first section, reserved for large companies, of the exchange of shares in Tokyo, as calculated by the business Japanese publication Nikkei, owner of the Financial Times. Shares controlled by those institutions represent a quarter of all shares listed in Tokyo. These acquisitions stimulate the growth of stock prices (in five years Nikkei index rose by 70%) but undermine market mechanisms mainly benefit businesses bringing two great favorite public sector buyers, analysts say.

Japanese companies’ stock prices rose even if the yen got appreciated affecting exporters. These players do not appear on lists held by the current shareholders as they indirectly own the assets, through special banks and other intermediaries.

The pension fund and the central bank probably hold 17% equity of the TDK (electronics manufacturer), 16.5% from Advantest (automatic test equipment for the semiconductor industry), Nitto Denko to 14.2% (manufacturer of LCDs) and over 10% of Konami Holdings (entertainment service provider) and Secom (security provider).

The European Central Bank also turned for negative interest rates and, some analysts say, it could turn towards the purchases of shares because it could remain without bonds that are eligible for its program of bond purchases.