Japan’s Nikkei drops after BOJ’s plan to buy only Topix-linked ETFs By Reuters

TOKYO, March 19 (Reuters) – Japan’s benchmark Nikkei fell as
much as 1.9% on Friday, while the broader Topix hit a 30-year
high as the Bank of Japan said it would only buy Topix-linked
exchange traded funds after a review of its policy framework.
Nikkei share average fell 1.15% to 29,868.00 by 0436
GMT. The broader Topix gained 0.14% to 2,011.29, having
briefly hit its highest level since 1991.
Following its two-day policy meeting, the Bank of Japan said
it would only buy exchange-traded funds (ETF) that are linked to
the Topix index.
The BOJ also said it will buy up to 12 trillion yen at most
and also slightly broadened a trading band for its 10-year bond
yield target, widely as expected.
Nikkei heavyweight Fast Retailing , the operator of
Uniqlo clothing stores fell 4.6%. Another heavyweight SoftBank
Group fell 2.01%.
The so-called NT ratio .NTIDX of the Nikkei and Topix
dropped sharply to 14.84 from 15.04 on Thursday. It hit a record
high of 15.68 earlier this month.
But some analysts said the Nikkei’s underperformance will be
fairly short-lived.
“The impact of the BOJ’s move on the Nikkei will be
limited,” said Shingo Ide, chief equity strategist at NLI
Research Institute. “It will contribute to a healthy correction
in the NT ratio.”