The Nikkei closed at its lowest level since December 2018 today
In a parliament session yesterday, BOJ governor Kuroda said that the average cost of its ETF purchases was equivalent to around 19,500 in the Nikkei. The close today falls short of that level as the index closed at 19,416.06.
At this stage, a further fall in Japanese stocks won't only undermine the BOJ's credibility in the market but this will also eat at the central bank's capital base.
For now, the difference is very much negligible but a further 15-20% drop will be interesting to watch. The BOJ will be able to hold the losses since they don't have capital requirements but it'll be interesting to see how far they are willing to go.
